First-time buyers need more homes and greater mortgage affordability, not a stamp duty threshold freeze

New expert insight from Yopa, the full-service estate agents, reveals that should the government fail to extend current stamp duty relief beyond next March in this week’s Autumn Statement, it would make very little difference to the average first-time buyer, with just two regions set to see an increase in stamp duty costs as a result.

Yopa analysed the latest Gov figures on first-time buyer transactions, which show that annually, there has been a 35% increase in buyers getting their first foot on the ladder.

Over this period, first-time buyer transactions increased in every region of England with the biggest increase being recorded in London (+75%), followed by the South East (+38%) and East Midlands (+34%).

It’s clear that despite more difficult market conditions caused by higher mortgage rates, the appetite of aspiring homeowners has not diminished and this increase in transaction volumes comes despite the fact that the average price paid by a first-time buyer has climbed by 8% during the same period.

As it stands, first-timers do not pay stamp duty on any purchase below the value of £450,000, thus making it supposedly easier for FTBs to get a foot on the ladder.

However, come March 2025, the stamp duty reprieve currently offered by the government is set to revert back to previous thresholds, which will see first-time buyers exempt from paying stamp duty on purchases up to £300,000 instead of the current threshold of £450,000.

As a result, many across the property sector are calling on the government to extend the current stamp duty exemption threshold beyond March of next year in this week’s Autumn Statement. But analysis from Yopa shows that doing so would make very little difference to the nation’s first-time buyers.

Currently, the average first-time buyer house price tops the £450,000 threshold in just one region – London. Here, the average first-time buyer house price of £461,450 means the average FTB pays just £1,822 in stamp duty.

Should the current SDLT exemption threshold revert back to £300,000, it would see the cost of stamp duty for the average first-time buyer in London climb to £8,072.

In the South East, the average cost of SDLT would climb from nothing currently, to £405.

However, in every other region of England, the current average first-time buyer house price sits below the £300,000 threshold, meaning FTBs would still pay nothing in stamp duty when purchasing their first home.

Yopa’s National Franchise Director, Steve Anderson, said, “It’s looking increasingly likely that the stamp duty exemption threshold will revert back to £300,000 from March of next year. However, it’s only first-time buyers purchasing in the most expensive regions that are due to see an increase in the cost of stamp duty should this be the case.

In fact, the vast majority will continue to pay no stamp duty due to the fact that the average price of a home still falls below the £300,000 threshold.

There are now whispers that we could see the government keep current SDLT thresholds in place for first-time buyers in this week’s Autumn Statement, but it’s fair to say that this is a pretty meaningless gesture should it come to fruition.

The real issue facing today’s first-time buyers is the lack of housing supply and the high cost of funding a purchase in the long-term due to increased mortgage rates.

So what we would really like to see is the government follow through with its commitment to building more homes, whilst also focussing on lowering interest rates in order to make mortgages more manageable.”