The findings from Zoopla revealed the potential savings for first-time buyers if they complete their purchase before the beginning of April next year.

These savings are available due to the reduced stamp duty that first-time buyers currently pay compared to the scheduled rise next April.

However, with the typical property sale taking 25 weeks from listing to completion, according to Zoopla, it means buyers have a limited amount of time left to meet the deadline.

Based on the average property transaction time of 25 weeks, Zoopla said first-time buyers have just two months left to complete their transactions if they want to reap the benefits, with these buyers having an additional month as they don’t have a property to sell that needs to be listed first.

First-time buyers benefitted when stamp duty rates were temporarily reduced in the infamous 2022 mini Budget.

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The stamp duty rates will return to their previous thresholds from 1 April next year, assuming there are no further changes announced in the Autumn Budget on 30 October.

It means the number of first-time buyers paying stamp duty will increase as the threshold reduces from the current level of £425,000 to £300,000.

First-time buyers purchasing homes priced between £500,000 and £625,000 will also lose out, as they currently only pay the lower rate of 5% on the amount that falls in this bracket.

 

‘A tax on moving home in Southern England’

Zoopla said that these changes will mean that a third of first-time buyers in England will pay more stamp duty from April next year than they do today.

The property website also claimed that stamp duty remains “essentially a tax on moving home in Southern England”.

House prices tend to be higher in this region compared to the rest of the country and so buyers are more likely to end up paying stamp duty.

From 1 April next year, the average first-time buyer in London will face a stamp duty bill of £5,600, while it is £1,390 in the South East and £1,040 in the East of England, compared to nothing today.

In some areas of London, first-time buyers could pay an additional £15,000 in stamp duty once the planned changes come in and if there is no change announced in the Autumn Budget.

These areas in London include Camden, Hammersmith and Fulham, and Islington, according to Zoopla.

Meanwhile, lower mortgage rates have reduced the average monthly mortgage repayment from £1,076 a year ago to £979 today for a typical first-time buyer.

First-time buyers in the South East and East of England buying ahead of the stamp duty changes will save close to one month’s worth of mortgage payments in stamp duty.

Those in London, meanwhile, could save the equivalent of three-and-a-half monthly mortgage payments.

This compares to only 5% of first-time buyers in Northern England and the Midlands who are affected.

House prices tend to be lower in those regions, with the majority of buyers in the North of England, the East of the country and the West Midlands unaffected.

Around 95% of first-time buyers within these regions are currently looking for homes priced below £300,000 and therefore will not be impacted by the incoming changes.

This is due to the average house price in the majority of areas within these regions sitting below the first-time buyer stamp duty threshold of £300,000.

For example, the average house prices in key cities in the regions are £226,600 in Manchester, £209,800 in Leeds, £211,000 in Birmingham, £154,900 in Newcastle and £159,600 in Liverpool.

Izabella Lubowiecka, senior property researcher at Zoopla, said: “Thousands of first-time buyers have benefitted from the relief in stamp duty introduced in 2022.

“With just two months to go, those looking to purchase their first home should act this autumn if they are to avoid paying more in stamp duty, particularly if they are looking to purchase a home in Southern England, an area where first-time buyers are likely to see a sizeable increase in stamp duty once the changes come into effect next April.

“Those not looking to purchase until after April 1 should make sure they build the additional stamp duty fees into their plans and account for it in their overall budgets.”