Eight in 10 FTBs could benefit from current Stamp Duty rules, research reveals

Eight in 10 first-time buyers (FTBs) searching for a home on Zoopla have been looking for homes priced under £425,000, making them potentially exempt from Stamp Duty, new research has revealed.

Zoopla has analysed first-time buyer enquiries on home for sale to identify where the current benefit will be retained.

Analysis of enquiries for property on Zoopla from first-time buyers (FTBs) over the last six months showed that while eight in 10 are looking for properties under £425,000 – 15% of FTBs have been searching for homes between £425,000 and £625,000 and would pay partial Stamp Duty, assuming the current rules are extended

7% of FTBs are looking over the £625,000 threshold and would still have to pay full Stamp Duty.

In addition, research found that FTBs searching to buy in southern England are generally having to look for higher-value homes and face paying the most Stamp Duty.

What’s more, Half of ‘would-be’ FTBs in London would pay full or partial Stamp Duty if the current rules are extended.

Richard Donnell, executive director at Zoopla, said: “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.

“The greatest beneficiaries are those looking to buy across southern England where up to half of first-time buyers are looking to buy homes priced between £250,000 and £425,000.

“We find that 7% of first-time buyers would still pay full Stamp Duty, most of whom are looking in London and 15% would pay partial Stamp Duty.   

“A return to the old rules and price thresholds would have seen 30% of first-time buyers paying Stamp Duty once again.”

He added: “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.”