Home buyers race to beat stamp duty rise

Homebuyers are racing against the clock to complete their property transactions before the end of the month to avoid paying thousands of pounds in extra stamp duty. With the stamp duty threshold in England and Northern Ireland set to change on April 1st, first-time buyers will face greater financial pressure, especially given the affordability challenges they already face.

One couple stated that they felt "like we're in a race and our prize is £11,000." Lenders say that a large proportion of people across the country will be forced to pay stamp duty, but the government says they are helping more people to buy their first homes.

Currently, homebuyers purchasing properties valued below £250,000 are exempt from stamp duty. This figure was doubled from £125,000 in Liz Truss's mini-budget in September 2022. The threshold for first-time buyers is £425,000, up from £300,000 as part of the mini-budget. These higher thresholds will end in early April, when they will revert to their previous levels.

Paul Gorton starred in the hit 2024 reality show, The Traitors. The 37-year-old and his partner, Kate Waldron, now face another high-stakes challenge as they must complete the purchase of their first home in time. "We're walking a tightrope with only a few weeks to go, or we'll lose a huge amount of money for no reason," said Mr. Gorton. They are trying to buy a property in Congleton, Cheshire. Ms. Waldron, 34, said it was a particularly stressful time as she had only given birth to their baby, Cooper, three months ago. They already have a two-year-old son, Charlie, and a dog named Buddy. "We're doing everything at once. This deadline is looming and adding extra pressure," she said.

If they miss the deadline, they will lose £6,500, despite having already put all their money into the deposit and facing the prospect of regular bills and childcare costs. Karen Potter, an estate agent in Southport, has around 37 clients who are at risk of missing the deadline. "In a very stressful area, we've added this panic, which is putting them under another kind of pressure," she said. Property portal Rightmove estimates that in England, approximately 25,000 first-time buyers and 74,000 home movers are in the process of buying a home and will not be able to complete their transactions in time to meet the deadline.

Mortgage brokers are reporting that some homebuyers are pulling out of deals because they cannot move in before the end of March. An analysis by Skipton Group, which includes a building society and an estate agency, shows that in England, the proportion of areas where the average price of homes purchased by first-time buyers falls within the stamp duty range will rise from 8.4% on April 1st to 32%. Stamp duty has been a more common problem for homebuyers in the South East of England, as house prices are higher there. Due to the changes in the threshold, some people will face higher stamp duty bills.

Jonah Kavanagh and Ellie Van Petersen are hoping to buy their first home together in Guildford. They and their seller are working hard to ensure that the move is completed in time. If they fail, they will pay an additional £11,000 in stamp duty. "It feels like we're in a race and our prize is £11,000," said Mr. Kavanagh, 29, who contacted BBC News's "Your Voice, Your BBC News" section about the issue because he was concerned about others in a similar situation. Ms. Van Petersen said that there was a lot of "uncertainty, anxiety and stress" now, in addition to the shock that the budget did not announce an extension to the stamp duty relief.

The government has previously stated that the budget is a necessary measure to address the hole in public finances and that other changes are freeing up properties for first-time buyers. A Treasury spokesperson said: "We are committed to helping hardworking people in the UK own their own homes, which is why we are reforming the planning system and building more than 1.5 million homes." For Mr. Kavanagh and Ms. Van Petersen, if they miss the deadline, the impact will be less money for living expenses, furniture, unexpected costs and reasonable savings.