The Conservative Party will pledge to keep the stamp duty threshold for first-time buyers at £425,000 in its manifesto.
The nil-rate threshold for FTBs was lifted from £300,000 during former Prime Minister Liz Truss’ 2022 mini-Budget — but the rate is set to return to its former rate at the end of March next year.
Also, in the mini-Budget, the maximum value for partial relief for FTBs was raised from £500,000 to £625,000.
However, Prime Minister Rishi Sunak is expected to make the nil-threshold move permanent in the Conservative manifesto this week, according to various weekend reports.
In England, 203,300 FTBs claimed stamp duty relief in 2022/23, saving £708m, or an average of £3,500 per property purchase, HMRC data shows.
Keeping the stamp duty exemption at £425,000 mostly helps FTBs buying in London and southern England, where up to half of these buyers are looking to purchase homes priced between £250,000 and £425,000, according to Zoopla.
The property website adds that its analysis of FTBs over the last six months shows:
Zoopla executive director Richard Donnell says: “A return to the old rules and price thresholds would have seen 30% of FTBs paying stamp duty once again.
“The primary challenge for FTBs 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.”
