by Sam Akbay
Market Report
In recent months, the U.K. property market has witnessed a surge in first-time buyers snapping up higher-priced homes. This frenzy comes ahead of significant changes to the stamp duty tax break set to take effect in April, as highlighted in a report by Hamptons estate agency.
Record-Breaking Activity Among First-Time Buyers
According to the report, the share of homes purchased by first-time buyers soared to 31.8% in November and December 2024—the highest on record. This unprecedented activity is largely driven by the impending reduction in the stamp duty threshold. Starting April 2025, first-time buyers will begin paying stamp duty on properties priced above £300,000, a significant decrease from the current threshold of £425,000.
This adjustment will dramatically increase the proportion of first-time buyers subject to stamp duty, rising from 8% to 26%. The financial implications have motivated many to act quickly, particularly those targeting properties priced above the current £425,000 threshold.
A Shift Toward Higher-Priced Homes
The report highlights a notable shift in buyer behavior. In the final months of 2024, first-time buyers accounted for a record 20.8% of homes sold at £425,000 and above. This contrasts sharply with the declining share of homes priced under £300,000, which fell to 34.1% during the same period.
Aneisha Beveridge, head of research at Hamptons, noted: “We’ve seen a particular uptick in purchases over £425,000, where new buyers face the biggest tax bill hikes. The urgency among buyers in this category is palpable.”
Navigating Completion Timelines
With average property transactions taking approximately four months to complete, time is of the essence for those hoping to avoid the higher tax bills. The weeks leading up to the April deadline will be critical for buyers aiming to finalize their purchases under the current stamp duty rules.
Implications for the Market
The rush to buy higher-value properties underscores the broader financial pressures faced by first-time buyers. The upcoming changes may also alter market dynamics, with a possible slowdown in activity post-April as buyers adjust to the new tax landscape.
As the April deadline looms, the property market is braced for a critical few months, with first-time buyers leading the charge in an effort to maximize savings. For those considering entering the market, swift action and expert guidance will be key to navigating this period of change.
