“First time buyers are already facing significant challenges, from higher mortgage costs to rising rents while they save,” said Colleen Babcock, highlighting the struggles many are experiencing in the current housing market.
Recent changes to stamp duty, which saw the threshold for first-time buyers reduced from £425,000 to £300,000, have added to these challenges. As a result, first-time buyers in England now face an average increase of £4,618 in stamp duty costs.
According to recent data, first-time buyers collectively paid an estimated £307 million more in stamp duty over the past twelve months compared to the previous year. The total stamp duty bill has skyrocketed to £408 million, a significant jump from just £101 million during the preceding period.
Notably, 53% of the total stamp duty amount paid since the threshold reduction took effect came from London, while the South East contributed 23%. In stark contrast, the North East accounted for a mere 0.3% of the total, illustrating the regional disparities in the housing market.
“These figures underline the increasing strain on first time buyers, with higher stamp duty costs adding to already significant affordability challenges,” commented Nathan Emerson, emphasizing the growing difficulties faced by new homeowners.
More than three-quarters of first-time buyers have purchased properties exceeding the new £300,000 threshold this year, further complicating their financial situations.
Aneisha Beveridge added, “Stamp duty is increasingly becoming another barrier for would-be homeowners, particularly at a time when first-time buyers are also having to save hard for a deposit amid high rents and rising living costs.” This sentiment resonates with many who are navigating the complexities of homeownership.
As the EMI scheme expands to support around £100 million of additional investment a year, there is hope for some relief in the housing sector. The gross assets test for the EMI scheme has quadrupled, and the employee limit has doubled, which may provide new opportunities for businesses and potential homeowners alike.
With the stamp duty changes implemented after temporary relief ended in April 2025, many are left wondering how these adjustments will continue to affect first-time buyers in the months to come.
