Stamp Duty Tax Relief for First-Time Buyers
The past few months have been a busy time for the housing market, as homebuyers rushed to complete before the changes to Stamp Duty. If you’re looking to purchase your first home, there is Stamp Duty tax relief still available for first-time buyers. In this blog, we look at the new tax thresholds and the latest challenges for those trying to buy their first property.
Continuing affordability challenges
The cost of buying a home has risen significantly for first-time buyers, and the current economic climate is still challenging. According to Barclays, this is having an impact on first-time buyers saving enough for a deposit. Although there was a recent 6.7% fall in utilities, except for energy, it’s been estimated that 41% are still trying to reduce their monthly bills.
When asked to identify the main obstacles to homeownership, 40% of renters said this was due to property prices, while 37% cited deposit affordability. Around six in 10 renters (57%) believe that it’s not possible to buy without receiving an inheritance or funds from the Bank of Mum and Dad. Although only 18% of recent first-time buyers confirmed they’d had financial support from a family member.
However, 35% of renters are proactively trying to save up to buy their first home themselves without any external support. In addition, 17% are looking to buy their first home with a partner or friend.
It’s also been reported that 29% of new homeowners have made use of first-time buyer schemes to help them get onto the property ladder. Also, around a quarter of these buyers opted for longer mortgage terms to help them reduce their monthly mortgage repayments.
For more information on first-time buyer schemes, see our blog, Update on First Time Buyers Relief.
Changes to Stamp Duty
On 1 April 2025, the threshold for Stamp Duty tax relief changed. First-time buyers now pay Stamp Duty on homes valued over £300,000. The nil-rate threshold for all other homebuyers has reduced from £250,000 to £125,000. As a result, the availability of Stamp Duty free homes for first-time buyers has fallen.
Previously, it’s thought that around a third of properties were within the nil-band rate for Stamp Duty (Financial Reporter). However, this has now reduced to an estimated 8%, as fewer homes are valued at £125,000 or lower.
Mortgages for First Time Buyers
If you’re a first-time buyer, there are various schemes and Stamp Duty tax relief to help you get onto the property ladder. If you would like to discuss how longer mortgage terms could help you reduce your monthly repayments, then speak to our mortgage advisers.
At Bubble Finance Hub, we’re here to help first-time buyers make their property dreams come true. If you’re looking to buy your first home, our approachable and empathetic team offer a bespoke approach to mortgage advice. As we have whole-of-market access, we can compare hundreds of mortgage deals to help you purchase your first property.
If you’re looking to buy your first home and need advice, get in touch to book an appointment.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage.
Thank you for reading our blog, Stamp Duty Tax Relief for First-Time Buyers.
Bubble Finance Hub