"Every penny counts when considering things like legals and removal costs, so it’s great to see so many people make the most of the holiday and secure their new home ahead of the 1st of April"
- Graham Sellar - Santander
Santander UK has reported that it saw mortgage applications surge by 130% in Q4 2024 compared to Q4 2023, as buyers rush to secure a property purchase during the Government’s stamp duty holiday.
According to estimates, the average property purchase takes four months from mortgage offer to completion, meaning buyers securing a mortgage offer before the end of 2024 will have maximised their chances of benefitting from lower stamp duty costs, ahead of April's deadline.
As a result, a first-time buyer purchasing a home priced between £300,000 and £500,000 will face a 5% stamp duty charge on an additional £125,000 of borrowing, adding thousands of pounds to the overall cost. All other buyer types will pay 2% on the amount between £125,000 and £250,000 – a potential extra cost of up to £2,500.
First-time buyer impact
First-time buyers are set to see the biggest increase in potential costs as a result of the changes to stamp duty. In the South East, where the average house price is £385,600, first-time buyers could save up to £4,280 in stamp duty by purchasing before 1 April. After the change, if they are buying a property over £500,000, they will be faced with the same stamp duty costs as a next-time buyer, for example in London, where prices average £535,700, this would add a potential extra cost of £11,250.
First-time buyers compromising on location
Recent research by the bank reveals that first-time buyers are increasingly compromising on location to fulfil their dream of owning a home. 67% of Brits who bought their first home in the last two years had never seen their new neighbourhood before buying, compared to 51% of those who bought more than five years ago. According to the research, first-time buyers moving to new neighbourhoods in the last two years saved an average of £29,000 compared to buying a house in the area they lived in before.
Areas like Waverley in the South East and Waltham Forest in Greater London have experienced the greatest rise in first-time buyer sales over the past decade, highlighting sustained demand in these regions.
Graham Sellar, Head of Intermediary Channel – Mortgages, at Santander, said: “We all know that buying a home – whether it’s our first or our forever home – comes with significant costs. Every penny counts when considering things like legals and removal costs, so it’s great to see so many people make the most of the holiday and secure their new home ahead of the 1st of April.”
