Buyers rushing to purchase a home before the stamp duty thresholds change in April have caused in a 130% surge in mortgage applications, a high street bank reports.
From 1 April, stamp duty bands will revert back to their pre-September 2022 levels, driving up tax bills for first-time buyers and homemovers by thousands of pounds.
With the average property purchase taking four months, as estimated by Santander, buyers acted quickly to get their move underway, leading to a 130% increase in mortgage applications received by the bank in Q4 compared to the same period in 2023.
First-time buyers purchasing a home from 1 April will begin paying stamp duty from £300,000 instead of £425,000, as first-time buyer relief, which was upped in September 2022, reverts to its original level. Meanwhile, other buyers will once again begin paying stamp duty at £125,000.
Where will first-time buyers pay the most stamp duty?
First-time buyers in almost a third of local authorities in England will see the cost of buying a home rise in 2025 when stamp duty thresholds reduce.
How the housing landscape is set to shift
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Increases in the amount of stamp duty that will be paid from 1 April range from £100 in areas such as Adur, Stratford-upon-Avon and Cherwell to £6,000 in the London boroughs of Redbridge and Newham and the city of Cambridge.
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, according to analysis by Santander.
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.
Graham Sellar, head of intermediary channel for 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 removals costs, so it’s great to see so many people make the most of the holiday and secure their new home ahead of 1 April.”
