Chancellor Rachel Reeves (Image: WPA Pool, Getty Images)
More than 25,000 first-time home buyers in England are expected to miss the crucial March end stamp duty deadline, with their completions now likely to take place in April, according to a leading property website’s calculations. As of April 1, the “nil rate” band for first-time purchasers will drop from £425,000 to £300,000 and other buyers will see their nil rate lowered from £250,000 to £125,000.
Rightmove has analysed the total number of properties presently under the completion phase and when they are set to finish, factoring in variables such as location and type of dwelling. This analysis relies on properties listed as sold subject to contract (SSTC) and the average duration for completing a property purchase, which stands at 163 days—or marginally over five months.
According to Rightmove’s computations, those first-time buyers finishing transactions in April instead of by March 31 could face a collective surcharge of £34 million due to additional stamp duty charges. The portal made its predictions focussing predominantly on deals involving dwellings with two bedrooms or less and priced up to £625,000.
In total, nearly 74,000 home movers across England are poised to narrowly miss the deadline, concluding in April instead. Rightmove points out that while more homes are presently going through the legal finalisation process, most would have fallen short of meeting the March 31 deadline anyhow.
Home-movers who miss the March 31 deadline and complete in April will face a hefty £142 million extra in stamp duty payments, Rightmove has calculated. The south east of England is particularly affected, with many just missing out on the savings.
More than 25,000 first-time buyers in England are to miss the stamp duty deadline at the end of March (Image: Lauren Hurley/PA Wire)
As the deadline nears, a conveyancing bottleneck is expected, with buyers scrambling to finalise their purchases. Colleen Babcock, a property expert at Rightmove, commented: “We expect a rush to complete close to March 31 as first-time buyers and home-movers try to avoid paying extra in tax.”
Nathan Emerson, chief executive of Propertymark, expressed concern for first-time buyers who may be disheartened by the additional costs from April, often due to delays beyond their control within the property chain.
Rightmove provided data on the percentage of homes for sale in various English regions below the current “nil rate” stamp duty band for first-time buyers of £425,000, and those priced under £300,000, the new “nil rate” band starting April 1: North West at 77% and 59%, North East at 87% and 74%, and West Midlands at 73% and 51%.
Here are the percentages of homes for sale in regions across England at less than the current “nil rate” stamp duty band for first-time buyers of £425,000, and here are the percentages of homes for sale which are priced at under £300,000, the “nil rate” stamp duty band for first-time buyers from April 1, according to Rightmove:
North West, 77%, 59%
North East, 87%, 74%
West Midlands, 73%, 51%
London, 27%, 9%
South East, 49%, 28%
East of England, 59%, 35%
East Midlands, 77%, 56%
South West, 62%, 38%
and the Humber, 79%, 63%
Here are the extra amounts that home buyers will need to pay in stamp duty from April 1. Figures show current stamp duty charges, stamp duty charges from April 1 and additional stamp duty charges paid from April 1 for non-first-time buyers; followed by current stamp duty charges, stamp duty charges from April 1 and additional stamp duty charges paid from April 1 for first-time buyers:
Property purchase price: £125,000, £0, £0, £0, £0, £0, £0
Property purchase price: £250,000, £0, £2,500, £2,500, £0, £0, £0
Property purchase price: £425,000, £8,750, £11,250, £2,500, £0, £6,250, £6,250
Property purchase price: £500,000, £12,500, £15,000, £2,500, £3,750, £10,000, £6,250
Property purchase price: £625,000, £18,750, £21,250, £2,500, £10,000, £21,250, £11,250
Property purchase price: £750,000, £25,000, £27,500, £2,500, £25,000, £27,500, £2,500
Property purchase price: £925,000, £33,750, £36,250, £2,500, £33,750, £36,250, £2,500
Property purchase price: £1,000,000, £41,250, £43,750, £2,500, £41,250, £43,750, £2,500