First-time buyers in Haringey, Hackney, Richmond upon Thames and Wandsworth are set to face the biggest increases in stamp duty following last week’s Budget, figures show.
Analysis of data collected by mortgage advisor Alexander Hall highlights that the average first-time buyer in these four boroughs will pay £11,250 more in stamp duty from 31 March next year, whereas those in Barking and Dagenham, London’s most affordable borough, will face the smallest difference, at £876.
Under Rachel Reeves’ Budget, stamp duty thresholds were lowered to their previous levels, falling from £425,000 to £300,000 for first-time buyers and from £250,000 to £125,000 for buyers who have purchased a home before.
Currently, stamp duty relief for first-time buyers is applied to purchases of first homes up to the value of £650,000. But from April 2025 onwards, this will drop to £500,000.
In Haringey, Hackney, Richmond upon Thames and Wandsworth, the average first home costs over £500,000, meaning that most first-time buyers in these areas will not qualify for any stamp duty relief and will pay the same as those who have purchased a home before.
In these four boroughs, the average first-time buyer is set to face a stamp duty increase of £11,250. At present, the average stamp duty payment across these boroughs is £5,991. According to the data collected by Alexander Hall, this will rise to an average of £17,241.
First-time buyers in other boroughs can also expect to pay significantly more in stamp duty. In Lambeth, Barnet, Brent, Ealing, Harrow, Merton, Southwark, Tower Hamlets and Waltham Forest, stamp duty will rise by £6,250 on the average first property purchase (£1,903 to £8,153 on average).
And in areas like Redbridge, Newham and Greenwich, for example, first-time buyers will go from paying no stamp duty to £5,998, £5,809 and £5,605 respectively.
Those buying in Barking and Dagenham, however, are forecast to see the smallest difference, paying just £876 more. This is because the borough is also London’s cheapest for first-time buyers, with the average property costing £317,528.
The capital’s most expensive boroughs —Kensington and Chelsea, Camden, Islington and Westminster, Hammersmith and Fulham and the City of London— will also see a smaller increase of £2,500.
In these six boroughs, the average price of a first home already exceeds the current stamp duty relief limit of £625,000, meaning that the lower £500,000 threshold for relief will make little difference to buyers who were already paying higher stamp duty. In Kensington and Chelsea, for example, where a first home costs £1,006,572, buyers are already paying £41,925 in stamp duty.
In any case, the changes to stamp duty will have a disproportionate impact on first-time buyers in London, where house prices are higher. In 202 local authorities across England —68 per cent— the average price of a first home is below £300,000, meaning that most first-time buyers will still benefit from a stamp duty-free purchase. In London, the median increase is £4,029.
“Homebuyers across the nation will have been hoping for an extension to stamp duty relief thresholds but unfortunately this wasn’t to be the case. Many —particularly first-time buyers— will now be anxious to make their move before the March 31st deadline next year,” said Steve Anderson, national franchise director at estate agency Yopa.
“However, first-time buyers should rest assured that, largely speaking, a high proportion of property market stock will remain below the £300,000 threshold and so they will continue to benefit from a stamp duty free purchase.
“This chance of a stamp duty free purchase does, of course, differ depending on where you live in the country and it’s those looking to get a foot on the London property ladder who are likely to face the largest increase in the cost of buying.”
