First-time buyers are the backbone of the UK property market, but some areas are more reliant on them than others. Research reveals the areas where house prices could plummet if the stamp duty holiday is scrapped next year.
Currently, first-time buyers don’t pay stamp duty on the first £425,000 of a property’s price. This tax break has been a lifeline, helping many people get on the property ladder for the first time.
However, this tax break is set to end in April 2025. While Labour has pledged to keep the current threshold, they haven’t promised to extend the relief.
If the tax break does disappear, experts predict that some areas will be hit harder than others – particularly those areas heavily reliant on first-time buyers.
Where are the First-Time Buyer Hotspots?
Analysis from eXp UK reveals that across England, 19.1% of all homes sold annually are bought by first-time buyers.
But some areas are much higher. Topping the list are Stevenage and Barking and Dagenham, where a staggering 38.5% of all sales were to first-time buyers.
The top five first-time buyer hotspots are:
- Stevenage – 38.5% of sales
- Barking and Dagenham – 38.5% of sales
- Harlow – 37.5% of sales
- Newham – 37.5% of sales
- Watford – 36.8% of sales
Other areas with a high proportion of first-time buyers include:
- Bexley (36.6%)
- Dartford (36%)
- Thurrock (35.7%)
- Crawley (35.3%)
- Slough (35.3%)
- Bristol (35.3%)
What Happens if The Stamp Duty Holiday Ends?
Adam Day, Head of eXp UK, warns: “For the areas of the market most reliant on first-time buyer activity, this could prove particularly problematic, as the likelihood is that buyer demand levels will fall and this could inevitably cause house prices to do the same.”
If demand drops, prices are likely to follow. This could leave some first-time buyers trapped in negative equity, owing more on their mortgage than their home is worth.
What are the Solutions?
Industry experts urge the government to reconsider their position and offer more support for first-time buyers. Possible solutions include:
- Extending the stamp duty holiday. This would give first-time buyers more time to save for a deposit and buy a property.
- Introducing new initiatives to help curb the high cost of buying a first home. This could include schemes to help with deposits, or subsidies for first-time buyers.
Without help, first-time buyers could struggle. The end of the stamp duty holiday could see prices tumble, leaving thousands in negative equity.