Buyers in England might face Stamp Duty on 93% of properties if the current higher thresholds aren’t extended.
- Current Stamp Duty thresholds are £250,000 for homebuyers and £425,000 for first-time buyers.
- Thresholds are set to revert to £125,000 for homebuyers and £300,000 for first-time buyers by March 2025.
- In Yorkshire, Stamp Duty is currently paid on 49% of properties, potentially rising to 86%.
- London’s first-time buyers may need an additional year of savings due to these changes.
Research by Leeds Building Society reveals that if the higher Stamp Duty thresholds are not extended in the upcoming budget, a staggering 93% of properties in England will be subject to this tax. Currently, homebuyers benefit from a threshold of £250,000, and first-time buyers from £425,000. However, these figures are set to return to £125,000 and £300,000, respectively, by March 2025.
In regions like Yorkshire, the impact is particularly pronounced. Presently, 49% of homes incur Stamp Duty under the existing rules, but this is projected to escalate to 86% if the thresholds are lowered. Such an increase could significantly affect the affordability of homes in the area, potentially putting additional financial strain on buyers.
The situation is even more concerning for first-time buyers in London. Prospective homebuyers may find themselves needing to save for an extra 12 months to afford a deposit, due to the potential reversion of Stamp Duty thresholds. This is exacerbated by the fact that, while house prices for first-time buyers have multiplied sixteen-fold since 1982, gross earnings have only seen a sevenfold increase.
Leeds Building Society has articulated the need for a strategic overhaul to make homeownership attainable beyond those on high incomes or those receiving parental support. Andrew Greenwood, deputy chief executive of the society, highlighted the vital role a home plays in personal stability and community belonging.
He noted the importance of a long-term, cohesive plan to boost housing market stability, which would include increasing housebuilding efforts, assisting first-time buyers in saving for deposits, and extending pathways to affordable homeownership. The society has shown approval for governmental intentions to focus on social and affordable housing improvements.
A strategic, long-term plan is crucial for ensuring affordable access to homeownership in England.
