The Intermediary – February 2025 - Flipbook - Page 30
ON THE
PRECIPICE
HOW STAMP DUTY CHANGES ARE
SHAPING THE HOUSING MARKET
by Jessica O'Connor
Nearly four months on from the Autumn
investors alike, as Stamp Duty continues to be
Budget, the property market finds itself finally
a lightning rod for debate, its impact rippling
facing down the much-discussed Stamp Duty
across every corner of the housing market.
Land Tax (SDLT) measures that could shape its
trajectory in 2025 and beyond.
The Government’s decision not to extend the
Currently, buyers pay no Stamp Duty on
lower Stamp Duty threshold for first-time buyers
purchases up to £250,000, but from 1st April,
delivered a potentially devastating blow to those
that tax-free threshold will halve to £125,000 –
already struggling to get on the ladder. While
forcing many to fork out thousands more in tax
those already on the path were spurred on to
at the very point they can least afford it.
hurtle to completion, the decision forced many
aspiring homeowners to drastically rethink their
For first-time buyers, the hit is even greater,
with the special nil-rate threshold, initially
budgets, delay their homeownership dreams, or
designed to help more aspiring homeowners
abandon them altogether.
onto the ladder, dropping from £425,000 to
Meanwhile, landlords and second-home
hopefuls are also feeling the squeeze.
The Budget introduced an increase in the
Stamp Duty surcharge on second homes and
£300,000,
Jonathan Stinton, head of intermediary
relationships at Coventry Building Society, warns
of the potential pitfalls of these changes, noting
additional properties from 3% to 5% – an
that struggling buyers may be saddled with
attempt to cool speculative buying and placate
increased mortgage costs.
the rising cries for affordable housing.
For the private rented sector (PRS), already
under pressure from rising costs and regulatory
tightening, this surcharge could be a double-
He says: “Many buyers will have to find
thousands more in tax. For the average property
in England, that means an extra £2,500 to pay.
“If buyers don’t have that cash up front, they’ll
edged sword. Many landlords may decide to
likely have to borrow more, increasing the cost
offload properties, reducing rental stock and
of their mortgage over time. Some buyers will be
driving up rents, facing an increasingly hostile
forced to delay their purchase, while others may
investment environment that threatens to
be priced out of homeownership altogether.”
exacerbate the rental crisis.
These measures have created a cocktail of
challenges and opportunities for buyers and
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First-timers left behind
The Intermediary | February 2025
The repercussions extend beyond individual
buyers, with wider market implications likely
to follow.
