Rightmove is urging the government to retain the existing stamp duty thresholds and provide additional help for first-time buyers.
This call follows a new Rightmove study revealing that only 37% of homes for sale will be eligible for first-time buyer stamp duty relief in England when the existing thresholds revert in April 2025.
Currently, a first-time buyer in England pays no stamp duty on properties up to £425,000. As a result, the majority (58%) of homes for sale in England are exempt from stamp duty for first-time buyers, although there are significant variations across regions.
From April 2025, the stamp duty-free threshold is set to decrease to £300,000. According to the study, this change means that only 37% of the properties currently for sale would be stamp duty-free for first-time buyers, representing a reduction of 21%.
The South West and East of England would be most impacted by this change, while the North East would be the least affected. In London, fewer than one in ten homes will be exempt from stamp duty for first-time buyers in April 2025 if the old thresholds return, compared to a quarter now.
Since 2010, the average asking price of a home has risen by 62%, from £230,592 to £373,493. If purchasing a home at the current average asking price, a first-time buyer would pay £3,675 in stamp duty in 2025, compared with nothing now.
According to UK Finance, around a third of first-time buyers look to purchase properties over £300,000, weighted towards London and the more expensive regions.
As costs have increased, the average age of a first-time buyer has been rising over time. The average age of a first-time buyer is now 33, according to UK Finance data, compared with 31 in 2010.
Rightmove has welcomed new government proposals to help first-time buyers, including an initiative to give local first-time buyers the first chance to purchase homes on developments. The company added that the government’s housebuilding targets and planning reforms should also positively impact those buying for the first time.
However, Rightmove believes its analysis suggests there are some limitations with the mortgage guarantee scheme, and it is only likely to support a small number of first-time buyers. The company has suggested that making it permanent would at least give first-time buyers the confidence that it is an option for them.
In addition to calling for the existing stamp duty thresholds to be retained, Rightmove has suggested that a government review of mortgage affordability criteria and support for lender product innovations would help identify and potentially create more options for a greater number of first-time buyers.
Tim Bannister, Rightmove’s property expert, added: “The housing market is made up of many connected pieces – as owning your first home becomes more difficult, some people rent for longer, which places an additional strain on the rental sector.
“Stamp duty is a barrier to movement, and keeping the existing thresholds seems like a logical step to providing some first-time buyer support. Even greater stamp duty reforms in the future could have wider implications, such as helping those who are considering downsizing.”
