In the Autumn 2024 Budget, Chancellor Rachel Reeves confirmed that the temporary relief on stamp duty will expire on 31 March 2025, as previously outlined by the former government. This change brings an end to measures that have provided significant tax savings for buyers.
As the deadline approaches, the UK property market is gearing up for a period of heightened activity, with many buyers seeking to complete transactions before the new rates take effect.
The stamp duty holiday, introduced to support the housing market during challenging economic times, has been instrumental in reducing upfront costs for buyers.
However, its expiration is expected to drive shifts in market behaviour, from a potential surge in demand in the months leading up to the deadline to possible price adjustments and a slowdown in activity thereafter. Understanding these dynamics is crucial for both buyers and sellers navigating the market during this transitional period.
What Is Changing and How Will It Affect Buyers?
Currently, the stamp duty holiday offers:
● First-time buyers pay no stamp duty on the first £425,000 of a property purchase.
● Other residential buyers benefit from a £250,000 tax-free threshold.
From 1 April 2025, these thresholds will revert to:
● £300,000 for first-time buyers.
● £125,000 for all other buyers.
For example, first-time buyers purchasing a £425,000 property will face an additional £6,250 in tax from April. These changes will increase costs for buyers, influencing the timing of their purchases and the overall market.
The Likely Impact on the Market
Increased Demand Before March 2025
Buyers are expected to rush to complete transactions before the deadline, creating a surge in activity. Estate agents and solicitors may face high demand, and properties could fetch premiums as buyers compete to meet the cut-off date.
Potential Slowdown Post-Deadline
Once the relief ends, the market may experience a temporary lull as buyers who accelerated their purchases leave a gap in demand. This could especially affect mid-tier and higher-priced properties.
Pressure on Housing Supply and Affordability
The rush to buy may strain housing stock, especially in areas popular with first-time buyers, driving short-term price increases. For those unable to meet the deadline, the higher tax costs may create affordability challenges.
Should I Act Now?
For buyers, acting before 31 March 2025 could save thousands in stamp duty. However, navigating the competitive market requires careful planning.
- Assess Your Financial Position – Review your budget to ensure you can cover upfront costs, including deposits, legal fees, and potential price increases.
- Start Early – Mortgage Pre-Approval: Secure an agreement in principle to strengthen your position. Research conveyancers and surveyors known for efficiency to avoid delays.
- Be Strategic – Focus on properties that meet your essential needs while staying flexible on minor preferences.
- Negotiate Carefully – As competition intensifies, sellers may have more leverage. Be prepared to act decisively, but avoid exceeding your budget in the rush to buy.
For Sellers
The pre-deadline market presents an opportunity to achieve higher prices as buyer competition heats up. However, sellers should be mindful of a potential slowdown after March.
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