Home buyers are racing to finalize their property purchases before the end of March to avoid paying thousands of pounds in additional stamp duty. The looming deadline has placed immense pressure on first-time buyers, who will be particularly affected when stamp duty thresholds in England and Northern Ireland change on 1 April.
Currently, buyers of homes worth less than £250,000 are exempt from stamp duty land tax, but this threshold will revert to £125,000. First-time buyers currently enjoy a higher exemption limit of £425,000, but this will drop back to £300,000, making homeownership more costly for many.
These thresholds were originally increased as part of the September 2022 mini-budget, but with their reversal, thousands of buyers now face significant financial hurdles.
How Are Buyers Being Affected?
Many buyers who had carefully planned their purchases based on the higher thresholds now find themselves in a race against time. Paul Gorton, who recently appeared on the 2024 series of a popular reality TV show, and his partner Kate Waldron are among those facing an urgent deadline.
“We’re on a knife edge,” said Mr. Gorton. “We’ve got weeks, otherwise it’s going to cost us a large chunk for no reason.”
The couple, trying to purchase a property in Congleton, Cheshire, are under added pressure, as Ms. Waldron recently gave birth to their son, Cooper, three months ago. The couple also has a two-year-old son, Charlie, and a dog named Buddy.
“We’re doing it all at once. It’s an added stress with this deadline looming over us,” she said.
If they miss the deadline, they will need to pay an additional £6,500 in stamp duty, a sum that could have been used for regular expenses such as nursery fees and household bills.
How Many Buyers Are at Risk of Missing the Deadline?
Estate agents and mortgage brokers have reported a surge in concerns from buyers who fear they will not complete in time. Karen Potter, an estate agent in Southport, estimates that about 37 of her clients are at risk of missing the deadline.
“In a stressful arena anyway, we’ve got this panic where there’s another source of strain and stress for them,” she said.
According to property portal Rightmove, around 25,000 first-time buyers and 74,000 home movers in England could fail to complete their transactions before the deadline. Many mortgage brokers have also reported cases of buyers pulling out of deals entirely due to the uncertainty surrounding completion dates.
The Skipton Group, which includes a building society and estate agency, has analyzed the situation and found that the proportion of areas in England where the average first-time buyer home falls within the stamp duty threshold will rise from 8.4% to 32% on 1 April.
How Will This Impact Different Regions?
Stamp duty has long been a significant concern for buyers in the South East, where house prices are higher. The upcoming changes mean that even more buyers in these regions will be caught in the tax net, forcing them to stretch their budgets further.
Jonah Kavanagh and Elle Van Petersen, who are in the process of purchasing their first home in Guildford, are doing everything they can to beat the deadline. Missing it would cost them an extra £11,000 in stamp duty.
“It feels like we are in a race, and our prize is £11,000,” said Mr. Kavanagh, 29. He expressed concerns not just for himself but for others in a similar situation.
Ms. Van Petersen described the experience as filled with “uncertainty, anxiety, and nervousness,” particularly after the recent budget announcement did not extend the stamp duty relief.
What Has the Government Said About the Changes?
Despite the widespread concern among buyers, the government has defended the decision to reinstate previous stamp duty thresholds. Officials have argued that the budget was necessary to address financial shortfalls and that other measures will help first-time buyers in the long run.
“We’re committed to making home ownership possible for hardworking Brits,” a Treasury spokesperson stated. “That’s why we’re fixing the planning system and building 1.5 million more homes.”
For buyers like Mr. Kavanagh and Ms. Van Petersen, missing the deadline would mean significant financial setbacks, reducing their ability to furnish their home and save for unexpected costs. With the clock ticking, thousands of homebuyers across the country are left navigating an uncertain and stressful situation as they race to complete their purchases before 1 April.
