First-time buyer nil-rate stamp duty threshold should be retained – Rightmove
The nil-rate threshold for first-time buyers is temporarily set at £425,000 and this is due to revert to £300,000 in spring 2025.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Fewer than four in 10 (37%) homes for sale in England will be free from stamp duty for first-time buyers when existing thresholds revert from April 2025, analysis by a property website indicates.
The nil-rate threshold for first-time buyers was temporarily increased from £300,000 to £425,000 in 2022 and it only applies to purchases made up to March 31 2025.
Stamp duty only applies in England and Northern Ireland, with Scotland and Wales having other property taxes.
Rightmove said that, at present, the majority (58%) of homes for sale in England are free from stamp duty to first-time buyers, although this varies significantly by region.
Its analysis indicates that the South West and East of England would be most impacted by the change, while the North East would be the least impacted.
In London, fewer than one in 10 homes will be free from a stamp duty charge to first-time buyers in April 2025 if the old thresholds return, compared with a quarter now, Rightmove said.
Since 2010, the average asking price of a home has risen by 62%, from £230,592 to £373,493.
If they were buying a home at the current average asking price, a first-time buyer in England could face paying £3,675 in stamp duty in 2025, compared with nothing now, Rightmove said.
Stamp duty is a barrier to movement, and keeping the existing thresholds seems like a logical step to providing some first-time buyer support
The website said it welcomed Government plans to support people taking their first step on the property ladder, including boosting the supply of homes. But it argued that it could go further by retaining the current threshold.
It also suggested that a Government review of mortgage affordability criteria and support for lender product innovations could help to create more options for first-time buyers.
Rightmove chief executive Johan Svanstrom said: “We welcome the new Government’s meaningful ambitions for increasing housing supply.
“It should consider consumer support measures, by retaining the current first-time buyer stamp duty relief threshold of £425,000 in England and looking at solutions to help first-time buyers with not only their deposit, but also being able to borrow enough from a lender.
“Mobility and housing is an important growth engine for the overall economy. We’re looking forward to lending our support to any policies being considered.”
Rightmove analysed the properties currently available on its website for the research.
Its first-time buyer plea came as the group reported half-year figures showing pre-tax profits up 1.8% at £132.7 million on revenues 7% higher at £192.1 million and a stable estate agency membership, up 1% since the start of the year, at 19,061.
The group said possible upcoming interest rate cuts would further boost the housing market.
Mr Svanstrom said: “With the election now concluded, the property market looks forward to potential interest rate reductions which will further stimulate activity.”
Tim Bannister, a property expert at Rightmove, said: “The housing market is made up of many connected pieces – as owning your first home becomes more difficult, some people rent for longer, which places an additional strain on the rental sector.
“Stamp duty is a barrier to movement, and keeping the existing thresholds seems like a logical step to providing some first-time buyer support.
“Even greater stamp duty reforms in the future could have wider implications, such as helping those who are considering downsizing.”
A Government spokesperson said: “We will deliver 1.5 million new homes and will give first-time buyers the first chance to buy new homes, introducing a permanent, comprehensive mortgage guarantee scheme to support those first-time buyers who struggle to save for a large deposit.”
Nathan Emerson, chief executive at property professionals’ body Propertymark, said: “Cutting stamp duty helped many buyers take their first step onto the housing market during the pandemic.
“At a time where house prices remain unrealistic and challenging for many people, it is an important part of the process that the new UK Government looks to help people enter the housing market and retains the stamp duty threshold.
“But there needs to be a raft of other measures to stabilise house prices too.”
Here are the percentages of homes currently free from stamp duty for first-time buyers, followed by the percentages projected from April 2025, and the percentage point difference, according to Rightmove:
– North East, 86%, 74%, minus 12
– Yorkshire and the Humber, 79%, 61%, minus 18
– North West, 76%, 58%, minus 18
– East Midlands, 75%, 53%, minus 22
– West Midlands, 71%, 49%, minus 22
– South West, 58%, 34%, minus 24
– East of England, 56%, 32%, minus 24
– South East, 45%, 24%, minus 21
– London, 25%, 8%, minus 17