First-time buyers are making a dash for the finish line before stamp duty bills increase in April. We've seen a particular uptick in purchases over £425,000, where new buyers face the biggest tax bill hikes.
On the other hand, Movers are in less of a hurry and have generally been more successful in negotiating larger discounts to mitigate against a tax bill increase of up to £2,500.
With completion times averaging around four months, many of those agreeing sales now find themselves cutting it fine. Someone buying a freehold house will be more likely than someone buying a flat to complete before the end of March, as leasehold properties typically take an extra month to process. The next few weeks will be crucial for those hoping to avoid higher stamp duty bills.
Buyer types
First-time buyers are hurrying to purchase homes before stamp duty thresholds change in April 2025. The share of homes bought by first-time buyers across Great Britain increased to 31.8% in November and December 2024, the highest figure on record. Throughout the whole of 2024, first-time buyers purchased 31.2% of homes sold across the country, which was also an all-time high.
This increase comes after the news in the Autumn Budget that the threshold at which first-time buyers start paying stamp duty will fall from £425,000 to £300,000 from April 2025. The change is expected to more than triple the proportion of first-time buyers liable to pay stamp duty from 8% to 26%.
There’s been a particular increase in the share of first-time buyers purchasing more expensive homes who stand to save the most before stamp duty rises in April. Someone purchasing their first home for £625,000 will see the biggest increase in their tax bill from April, rising by £11,250.
First-time buyers purchased a record 20.8% of +£425,000 homes sold in November and December, compared to 17.5% for the whole year and up from 14.5% in 2023. In the last two months of 2024, 10% of first-time buyers paid more than £425,000 for their home, up from 8% for the whole of 2024.
In contrast, the share of homes sold for less than £300,000 to a first-time buyer fell to 34.1% in the last months of the year from 34.8% for the whole of 2025. These new buyers won’t see their stamp duty bill rise next year, therefore there’s less of a rush.
Regional variations
The more affordable parts of the country, where first-time buyers are least likely to see their stamp duty bill rise, generally saw a fall in the share of new homeowners.
In Wales, the share of homes bought by first-time buyers fell from 23% in 2024 as a whole to 19% in the final two months of the year. The same was true in the North East, the most affordable region in the country, where the share fell from 18% to 17%. Here, just 3% of first-time buyers will pay stamp duty from April, slightly up from 1% today.
Meanwhile, Yorkshire & the Humber saw the biggest rise in the share of homes bought by a first-time buyer, closely followed by the South West, West Midlands and London. First-time buyers purchased half (50%) of all homes sold in the capital during the last two months of 2024, the highest share in the country. 69% of these buyers purchased a home costing more than £300,000 and so will save if they are able to complete before the end of March.
Race against time
The window for guaranteeing completion before stamp duty changes is rapidly closing. In the past, only 29% of sales agreed complete within three months, with that figure falling to 13% within two months, and only 6% complete within a month.
Cash buyers purchasing a house who aren't in a complicated chain are most likely to meet the deadline. Just 4% of sales with a mortgage complete within a month, compared to 13% of sales funded with cash. Furthermore, due to the extra paperwork needed for leasehold properties, just 4% of flats complete within a month, compared to 6% of all homes.
However, first-time buyers are more likely to complete in time than movers, predominantly because they tend to be at the end of a chain.
Sellers accepting larger discounts
Sellers, many of whom are likely making onward purchases, were willing to accept larger discounts in Q4 2024. The median discount more than doubled from £2,000 in Q3 to £5,000 in Q4 2024, surpassing the maximum £2,500 increase in a mover's stamp duty bill from April.
Even so, the average seller in England & Wales achieved 98.1% of their final asking price in the final quarter of last year, a figure that remains higher than comparable pre-Covid periods.
The average first-time buyer secured a median £2,000 discount in Q4 2024, having been unable to secure a discount in Q3. Those purchasing their first home which cost more than £300,000 managed to negotiate larger savings, with a median discount of £5,000.
