New data from Fairview New Homes has revealed that 92% of first-time buyers in the UK do not have the funds to cover the additional cost of Stamp Duty Tax once the threshold is reduced for first-time buyers from £425,000 to £300,000 on 1st April.
In the developer’s survey of 2,000 UK adults aged 18 – 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, with just 8% claiming 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 believe they have the additional £5,000 tax due on a £425,000 home.
81% (68% in London) of the same respondents also believe it would take them over a year or more to save this amount, or don’t 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 says, “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.”
