The last few years have been good ones for first time buyers thanks to an increase in the stamp duty threshold in the mini-budget in 2022. As a result, there was no duty on homes up to £425,000. However, that is about to change with new rules to come in April 2025. We want to have a closer look at what it will mean for FTBs. Then, if you need some help with investment properties in Ealing, you can talk to us.

The change

As we said, the threshold for stamp duty is currently £425,000. As a result, first time buyers don’t pay any until they pass this point. Then, they pay 5% for values from £425,001 up to £625,000.

From April 2025, the threshold will go back to £300,000. There will then be 5% stamp duty on values from £300,001 to £500,000.

There are two things to note here. The bottom threshold is down, so lots more first time buyers will be paying duty. In addition, the upper limit for claiming FTB Relief is down to £500,000 from £625,000. So FTBs that buy properties worth over £500k will be not be able to get the lower rate.

The biggest impact

First time buyers in London will have the biggest issue with the change because of the high house prices in different parts of the city. In fact, the top ten areas where stamp duty costs will increase are all in the capital. They include Kensington and Chelsea, Richmond upon Thames, Islington, and more. If you are looking at investment properties in Ealing, you will also see a difference in stamp duty.

Several other locations outside of London will become more expensive for first time buyers because of the stamp duty changes. They include popular spots like South Cambridgeshire, Brighton and Hove, and Winchester. Interestingly, the only one in the North is Trafford, one of the most popular spots in Manchester.

Average prices

Looking at the UK as a whole, a lot of first time buyers may end up having to pay stamp duty from April 2025. The average house price is now over £267,000. So, in many areas the average property will be over the £300,000 threshold.

It will be a tough time for general buyers too. They will have zero stamp duty when buying a main residence worth up to £125,000. Then, up to £250,000 they will pay a new 2% duty fee. Above that, up to £925,000, there will be 5% duty. Next will be a higher rate of 10% for homes up to £1.5m. Finally, anything over that will cost the buyer 12%.

Think carefully about investment properties in Ealing

The stamp duty changes mean everyone will need to think carefully about buying properties, especially in parts of London. We will likely see a wave of people trying to complete deals before April 2025 to avoid the additional costs.

If you do invest or already have assets and would like some help, Finefair Ltd has several great services for you. We can do almost anything with investment properties in Ealing, including finding new opportunities, reviewing portfolios, and exploring HMOs. Even better, we are one of the best names for guaranteed rent in the whole city.

So, if you want fantastic services, speak to us.