Stamp-Duty Deadline Looms

Published: 16/01/2025

New data analysed by Mount & Minster estate agents and applied to properties for sale in Lincolnshire, Nottinghamshire and Leicestershire indicates that the proportion of homes purchased by first-time buyers throughout the East Midlands reached an unprecedented 32.1% in 2024, with figures climbing further to 32.9% in the months of November and December. 


According to Ralph Wyrley-Birch, Senior Partner at Mount & Minster, this surge is largely attributed to the forthcoming reduction in the Stamp Duty threshold, which was announced in the Autumn Budget.


From April 2025, first-time buyers will see the Stamp Duty exemption threshold drop from £425,000 to £300,000. The policy shift has triggered a notable increase in purchasing activity, particularly among those acquiring higher-priced properties, the area of expertise for Mount & Minster. This shift is expected to dramatically alter the landscape of first-time buyer tax liabilities.

The reduction in the Stamp Duty threshold will result in a more than threefold increase in the proportion of first-time buyers who will be liable for Stamp Duty, rising from 8% to 26%. In real terms, this could mean an additional £11,250 in tax for individuals purchasing homes valued at £625,000—a segment of the market that will experience the most significant tax hikes.

Notably, first-time buyers accounted for a record 20.8% of properties sold nationally for £425,000 or more during November and December 2024—an increase from 17.5% for the entirety of the year, and up from 14.5% in 2023. Furthermore, in the final months of 2024, 10% of first-time buyers paid over £425,000 for their home, compared to just 8% throughout the previous year. This uptick reflects a heightened awareness of the impending tax burden, driving many buyers to finalise transactions before the new rules take effect.

Mr Wyrley-Birch comments: "There were undoubtedly strategic purchases in the final quarter of 2024, with strong offers being made that would save proactive buyers thousands of pounds. Our data further highlights a shift in purchasing patterns, with a decline in the proportion of first-time buyers opting for properties valued under £300,000. The share of these lower-cost purchases fell to 34% in the final quarter of 2024, down from just under 35% for the full year. In contrast, first-time buyers purchasing homes above the £425,000 threshold have become more prominent, as they aim to mitigate the impact of the increased Stamp Duty rates expected in April. A lot of these buyers are relocating from London due to our relatively good-value properties and superb transport links."

He goes on to explain: "These trends signal an urgent scramble as first-time buyers rush to secure properties before the tax increase. With the conveyancing process typically averaging around three months, many buyers who have agreed on sales now find themselves in a race against time."

The timing of property completions will be crucial for those hoping to avoid higher tax liabilities. Buyers of freehold properties may have a better chance of completing their transactions before the March deadline, as the conveyancing process for leasehold properties often takes longer due to additional complexities. As a result, the next few weeks will be vital for first-time buyers seeking to lock in their purchases ahead of the Stamp Duty changes.

In conclusion, the imminent reduction in the Stamp Duty threshold has created a sense of urgency among first-time buyers, especially those purchasing higher-value homes. As the market reacts to this policy change, the next few months will likely see continued surges in activity as buyers race to finalise deals before the new tax regime is introduced.