A significant shift is on the horizon for property buyers in England if current higher Stamp Duty thresholds are not extended.
- Leeds Building Society research indicates that the majority of buyers will pay Stamp Duty if thresholds revert.
- Current thresholds are set to expire in March 2025, impacting many potential homeowners.
- Statistics show a stark financial challenge for first-time buyers, particularly in London.
- Industry calls highlight the need for a long-term solution to address housing affordability.
An important change looms for property buyers in England, as analysis by Leeds Building Society suggests a majority may face increased Stamp Duty payments if the current elevated thresholds are not extended beyond tomorrow’s Budget. Without intervention, 93% of property purchases could incur Stamp Duty costs.
The current Stamp Duty exemption thresholds, standing at £250,000 for standard homebuyers and £425,000 for first-time buyers, are scheduled to revert to £125,000 and £300,000 respectively by the end of March 2025. This reversion could substantially raise the tax burden on property transactions.
Focusing on Yorkshire, the research indicates a dramatic increase in the proportion of homes subject to Stamp Duty, rising from 49% to 86%. Such a surge underscores the financial implications for potential buyers in the region.
In London, first-time buyers face an even more daunting challenge. The study reveals that those currently renting privately might need an additional 12 months to save enough for a property purchase. On average, the timeline to save for a deposit while renting could extend to 25.8 years.
The disparity between house prices and earnings growth further compounds the difficulty for new buyers. In 2022, first-time buyer house prices were 16-fold what they were in 1982, with gross earnings only having increased seven times in the same period.
Leeds Building Society emphasised the necessity for housing market reforms, stressing the importance of making home ownership a feasible aim for individuals beyond those with substantial incomes or familial backing. The Society advocated for strategic changes to encourage broader homeownership possibilities.
Andrew Greenwood, deputy chief executive of Leeds Building Society, remarked on the intrinsic value of homeownership, noting its potential to foster community bonds. He expressed approval for the government’s focus on social housing but called for comprehensive strategies to ensure market stability and affordability.
The imperative lies in creating more housing opportunities, supporting first-time buyers in accumulating deposits, and widening affordable pathways to property ownership. Such measures are critical to address persistent challenges within the housing sector.
The looming changes to Stamp Duty thresholds necessitate urgent action to ensure housing market stability and affordability.
