Homebuyers across England and Northern Ireland are racing against time to complete their property purchases before a significant reduction in stamp duty allowances takes effect on 1 April 2025. According to a new analysis, over 120,000 buyers risk facing higher tax bills if they fail to complete their transactions before the deadline.
The changes, upheld by Chancellor Rachel Reeves, will see the tax-free stamp duty allowance halved from £250,000 to £125,000, while first-time buyers will see their tax-free threshold drop from £425,000 to £300,000. The looming deadline has created widespread concern, particularly among those entering the property market for the first time.
Stamp Duty Changes to Hit First-Time Buyers Hardest
The tax revision is expected to have a disproportionate impact on first-time buyers, many of whom may struggle to finalise their purchases before the deadline. According to data from TwentyCi, nearly 12,000 first-time buyers currently have offers accepted, with around 75% at risk of incurring an additional tax bill of up to £11,250 if they miss the cut-off.
Leasehold properties, which first-time buyers often purchase, generally take longer to complete, compounding the issue. Aneisha Beveridge, of Hamptons, highlighted this concern, warning that leasehold transactions could push completions beyond the deadline, increasing the likelihood of buyers facing unexpected costs.
The expected tax increase could force buyers to rethink their budgets, seek additional financing, or even withdraw from transactions altogether. Chris Sykes, of Private Finance, noted that many buyers would need to find a “huge amount of additional money,” potentially delaying their homeownership plans by years or requiring higher loan-to-value mortgages, leading to increased borrowing costs.
Market Bottleneck as Buyers Rush to Complete Deals
With the deadline approaching, the property market is witnessing a surge in urgency among buyers and solicitors. Nina Harrison, of Haringtons property consultants, described a wave of “non-stop WhatsApp messages” from anxious buyers pushing to finalise transactions before the deadline.
According to Hamptons, an estimated 124,000 home sales currently in progress could be affected, based on the average 136-day transaction period from sale agreement to completion. This has created a bottleneck, with many buyers hoping to secure deals before the tax increase takes effect.
Estate agents have warned that missed deadlines could lead to renegotiations or withdrawals from sales, as buyers attempt to mitigate unexpected costs. Hamish Allan, of Winkworth estate agents, noted that some buyers had factored in potential stamp duty costs in advance, either through price adjustments or pre-agreed cost-sharing arrangements with vendors.
A Treasury spokesperson defended the changes, stating that the government remains committed to “making homeownership possible for hard-working Brits” and citing planned reforms to the planning system and a commitment to building 1.5 million homes to address long-term housing challenges.
