Property website Rightmove is urging the government to rethink plans to slash the stamp duty relief available to first-time buyers, warning that it will price thousands out of the market.
Currently, first-time buyers don’t pay stamp duty on the first £425,000 of a property’s price. But this generous tax break is set to be scaled back drastically in April 2025.
Under the government’s plans, the threshold for first-time buyers will plummet to just £300,000. This means a young couple buying an average-priced home would be hit with a hefty £3,675 stamp duty bill – money they could be using towards furniture or renovations.
Rightmove warns that this could be a hammer blow to aspiring homeowners already struggling with the cost-of-living crisis and soaring house prices.
Fewer Homes Eligible for Tax Break
The property portal’s research reveals that currently, 58% of homes for sale in England are within the stamp duty-free bracket for first-time buyers. But if the changes go ahead, this will shrink to just 37% – locking many out of homeownership.
Some regions will be harder hit than others. In London, a paltry one in ten homes will be affordable for first-time buyers after April 2025.
Calls for Action
Rightmove is calling on the government to reconsider its decision and maintain the existing stamp duty thresholds for first-time buyers. It argues that this would provide much-needed support at a time when affordability is a major concern.
Johan Svanstrom, Rightmove’s CEO, said: “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.”
Impact on the wider market
Experts warn that failing to support first-time buyers could have ripple effects throughout the housing market.
Tim Bannister, a property expert at Rightmove, explains: “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.”
He believes that overhauling stamp duty could also encourage more older homeowners to downsize, freeing up larger properties for families.