Upcoming Changes to Stamp Duty: What It Means for Home Buyers

Are you considering buying a new home? Now might be the perfect time to make your move. The UK government is set to change Stamp Duty Land Tax (SDLT) thresholds from April 1st 2025, which could impact homebuyers significantly. By purchasing now, you could save thousands on stamp duty, making your dream home even more affordable. Here’s everything you need to know about the upcoming changes and how they might affect your plans to buy.

Key Changes to Stamp Duty Thresholds

Starting in April 2025, significant changes to the Stamp Duty Land Tax thresholds will take effect, impacting first-time buyers, homeowners moving up the property ladder, and second-home buyers. Here’s what to expect:

First-Time Buyers:

The current threshold for first-time buyers to start paying stamp duty is £425,000 but this will be dropping to £300,000 in April 2025. The maximum purchase price for which first-time buyers can claim relief will decrease from £625,000 to £500,000.

Homeowners Moving:

The nil-rate threshold will return to £125,000 from the current £250,000, meaning homeowners will pay SDLT on properties exceeding this amount. Second-home buyers will by affected by an increase in SDLT rates from 3% to 5%, leading to higher costs for those purchasing additional properties.

What Does This Mean for First-Time Buyers?

If you’re a first-time buyer, the changes coming in 2025 could create more challenges. Lowering the threshold from £425,000 to £300,000 means many buyers will be paying more in SDLT when purchasing a home. As a result, now is a great time to consider buying, especially if you’re looking at properties within the current thresholds. Moving before 31st March 2025 could save you thousands.

At Ascent Homes, we encourage potential buyers to take advantage of available plots that will be ready before the changes take effect. For plots completing on or after April 1st, we are exploring ways to support buyers and as always offering the best independent free mortgage advice through our recommended financial advisers, First Mortgages and Mortgage Pathways.

What Does This Mean for Second-Home Buyers?

The recent budget announcement increasing the SDLT rate from 3% to 5% for second-home buyers has made investing in additional properties more expensive. For example, purchasing a second home valued at £250,000 currently incurs a £5,000 increase in SDLT costs. These additional costs will increase again from April 2025.  

At Ascent Homes, we’re here to support all buyers by providing clarity and exploring potential workarounds to help mitigate any challenges posed by the immediate changes. We remain committed to assisting investors and homeowners, including those interested in developments like Allerburn Manor, Wayside Point and Willow Farm, to navigate these changes effectively.

Mortgage Costs & Market Reactions

While SDLT changes are a major talking point, buyers should also keep an eye on mortgage rates. The recent budget suggests mortgage rates may remain elevated for a little longer than expected. The Bank of England’s base rate is currently at 4.75%, with expectations of gradual reductions over the next five years. However, any shifts in base rates and inflation will likely impact the broader housing market.

Given these factors, potential buyers should carefully consider their mortgage options and seek expert advice to secure the most favourable rates. Our team at Ascent Homes is available to connect you with financial advisers to discuss your affordability and purchasing power.

Time to Act: Maximise Savings Before Changes Take Effect

The upcoming changes to SDLT thresholds and recent increases for second-home buyers underscore the importance of planning your home purchase. If you’re considering buying, acting now could offer significant savings. Our team at Ascent Homes is here to guide you every step of the way, ensuring you find the perfect home and make the most of any available incentives.

Interested in saving on your next home purchase? Explore our stunning developments at Allerburn Manor, Willow Farm and Wayside Point to secure your dream home before the changes take effect. Contact us today to learn more about available properties and how we can help you make the most of your home-buying journey!