First-time buyers could be in for a shock as the number of properties they can buy stamp duty free could plummet by 20% in 2025.

The warning comes as estate agents predict a squeeze on the number of affordable homes available if the current stamp duty holiday is scrapped.

Currently, first-time buyers pay no stamp duty on homes priced up to £425,000. This means a saving of £10,000 on the average UK house price.

However, this tax break is due to end in March 2025. The Labour party has committed to keeping the current system in place until then but has not guaranteed to extend it.

Return to £300,000 Threshold Would Hit First-Time Buyers

Experts predict that if the government reverts to the previous threshold of £300,000, the number of properties eligible for the tax break will fall by 20%.

That means 1 in 5 properties currently exempt from stamp duty would become liable for the tax.

East of England Set For Biggest Hit

Buyers in the East of England could face the biggest challenge, with 25.7% fewer properties eligible for the tax break.

Other regions set to be hit hard include:

• South West (-24.9%)
• South East (-24%)
• West Midlands (-21.4%)
• London (-19.1%)

First-Time Buyers Are “Core Part of Market Activity”

Colby Short, Co-founder and CEO of estate agent comparison site GetAgent, commented: “First-time buyers form a core part of market activity and stamp duty free incentives are a big draw when looking to reduce the cost of purchasing.”

He added: “The very best agents will likely be going through their databases now trying to get affected vendors onto the market and completed before any incentives are removed.”

The potential loss of the stamp duty relief could make it more difficult for first-time buyers to get on the property ladder. It could also lead to slower transaction speeds and reduced cash flow for estate agents.