Homebuyers are rushing to sidestep rising stamp duty costs – but there’s some respite for those who can’t
Homebuyers have just days left to complete deals before being hit with thousands of pounds in extra stamp duty costs.
From 1 April, “nil rate” stamp duty discounts for homebuyers will shrink, which Barclays estimates will cost people £6,512 in additional fees on average.
Among the changes, first-time buyers will start paying stamp duty on the value of property beyond £300,000 rather than £425,000.
Other buyers will see their zero rate threshold halve from £250,000 to £125,000.
In February, Zoopla calculated that the proportion of first-time buyers who will need to pay stamp duty – which applies in England and Northern Ireland – will double.
“More than half a million homes are currently going through the process of legally completing,” said Colleen Babcock, a property expert at Rightmove.
“Home movers who are in England, and still have a chance to beat the 31 March stamp duty deadline, will be rushing to finalise their paperwork, and doing all they can to avoid paying higher tax charges from April.”
Who will be impacted most by changes?
The most affected will be first-time buyers in higher-priced areas of southern England, where some could pay up to £11,250 more.
Less than one in 10 homes on the market in London are priced under £300,000, compared to 27% under £425,000, according to Rightmove.
By comparison, in the North East of England, 74% of homes for sale will be under the 1 April threshold, down from 87%.
Hannah Wright, head of new business at Taylor Rose, said solicitors are “working around the clock” to ensure completions can take place before the end of March.
Law firm Taylor Rose said it has seen conveyancing instructions nearly double in the first two months of this year, compared with the same period a year earlier.
Failing to meet the deadline? There is some respite
There may be some consolation from some lenders launching mortgage deals with cash sweeteners.
Yorkshire Building Society is offering first-time buyers up to £6,250 cashback, and Nottingham Building Society is offering buyers up to £5,000 in cashback.
Skipton Building Society has also launched a new cashback range.
