Property platform issues analysis following reports of changes to stamp duty for FTBs being made permanent
Eight in 10 first-time buyers (FTBs) searching on property website Zoopla over the past six months looked for homes priced under £425,000, thus qualifying for full relief from stamp duty under the current rules.
Meanwhile, 15% searched for homes priced between £425,000 and £625,000, which would incur partial stamp duty if current rules are extended, while 7% sought properties over the £625,000 threshold and would still pay full stamp duty.
FTBs in southern England typically search for higher-value homes and face higher stamp duty costs. In London, half of prospective FTBs would pay full or partial stamp duty if current rules continue.
The exemption from stamp duty for homes priced up to £425,000 benefits many FTBs in London and southern England, where up to half of FTBs look for homes priced between £250,000 and £425,000.
The current FTB stamp duty relief thresholds, which were increased in the 2022 mini-budget, are set to be reduced in 2025. These thresholds were raised to £425,000 for full relief and £625,000 for partial relief from the previous £300,000 and £500,000, respectively.
In England and Northern Ireland, FTBs receive a tax break to reduce stamp duty costs, unlike in Wales and Scotland where property prices are lower, and most FTBs pay little to no stamp duty.
Government data shows that in 2022-23, around 203,300 FTBs in England claimed stamp duty relief, saving £708 million, or an average of £3,500 per purchase. Of these, 150,000 paid no stamp duty, while 53,000 paid partial stamp duty for properties priced above £425,000 up to £625,000. Purchases above this maximum price incurred the normal stamp duty rates with no relief. 
“Our analysis of what first-time buyers are looking to buy on Zoopla shows eight in 10 would pay no stamp duty if the current measures were made permanent,” said Richard Donnell (pictured), executive director at Zoopla, commenting on the potential extension of the current rules by the Conservatives. “A return to the old rules and price thresholds would have seen 30% of first-time buyers paying stamp duty once again.
“The primary challenge for first-time buyers remains the need to afford higher mortgage rates and pass mortgage affordability tests. For many, this means injecting more equity into home purchases to reduce the level of income needed to buy. This impacts buyers across southern England where house prices are highest and average deposits are over £60,000.
“Building more homes at a wider range of price points and developing a market for long term fixed-rate mortgages are the key building blocks to help first-time buyers long term.”
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