More than nine in 10 (92%) first-time buyers do not have the funds to cover the additional cost of Stamp Duty once the threshold is reduced for first-time buyers from £425,000 to £300,000 on 1st April, data from Fairview New Homes has revealed.
In the developer’s survey of 2,000 adults aged 18 to 45 yet to own a home, respondents were asked how long it would take them to save the additional £5,000 required for Stamp Duty Tax on a home worth £425,000 post-1st April.
Just 8% claimed to already have that amount of money available.
In London, where the average price paid for a first home is now £456,290, just 15% of first-time buyers believed they have the additional £5,000 tax due on a £425,000 home.
81% (68% in London) of the same respondents also believed it would take them over a year or more to save this amount, or do not know how long it would take, meaning the majority of first-time buyers will be priced out of the London market this year.
Whilst a year-on-year increase of 12% in agreed sales has already been reported by Zoopla, indicating a rush to beat the deadline, time is either running out or has run out for many particularly in the second-hand home market where completions take an average of five months.
Chris Hood, sales and marketing director at Fairview, said: “We recognise that the Stamp Duty threshold changes effective 1st April will present a challenge to first-time buyers already facing significant upfront costs to get on the property ladder.
“The changes could cost our buyers up to £11,250 on top of their purchase – an amount that could or otherwise go towards decorating and furnishing their home, or the general cost of living.”
