The UK government’s stamp duty holiday ends in March 2024, leaving an estimated 25,000 first-time homebuyers in England facing potential completion delays into April and incurring up to £11,250 in extra charges. According to property market insights from Rightmove, the average homebuyer in England will face an additional £2,500 in stamp duty costs starting April 1st.
While first-time buyers purchasing homes priced up to £300,000 remain exempt from stamp duty, those buying properties between £500,001 and £625,000 will experience the most significant impact. This segment will incur an extra £11,250 in taxes due to the revised stamp duty regulations. Rightmove’s analysis focuses on properties with two bedrooms or fewer, typical for first-time buyers, and priced within the current maximum threshold for first-time buyer stamp duty exemptions.
Nearly 74,000 homebuyers in England are currently in the legal completion process and anticipated to miss the March 31st deadline. While a higher number of properties are undergoing legal processes, many were unlikely to meet the initial deadline. This delay will result in an estimated £142 million in additional stamp duty costs compared to completion in March. First-time buyers alone will face a collective £34 million in extra expenses.
Rightmove Urges for Extension, Experts Highlight Challenges
Rightmove advocates for a short extension to the deadline to alleviate the financial burden on the 74,000 homebuyers, particularly the 25,000 first-time buyers. Colleen Babcock, a property market expert at Rightmove, emphasizes the disproportionate impact on a specific group of first-time buyers due to the changing thresholds. The current average completion time for a home purchase in England is 163 days, contributing to the delays.
Nathan Emerson, CEO of Propertymark, notes the potential discouragement for first-time buyers facing thousands of pounds in extra costs, often due to delays outside their control. He suggests the UK government consider financial support to maintain the fluidity of the property chain. The South East of England, with the second-highest average home prices, is expected to see a substantial number of homebuyers missing the deadline.
In conclusion, the expiration of the stamp duty holiday poses significant financial challenges for thousands of homebuyers in England, particularly first-time buyers. The increased costs and potential delays highlight the complexities of the current system and the need for potential solutions to support aspiring homeowners.
