When current stamp duty relief reverts back to previous thresholds as of 1 April this year, fewer than one in 10 properties will present the chance of a stamp duty free purchase for existing homebuyers versus a third in the current market, fresh analysis shows.
Yopa analysed current for sale listings across the property market in England, looking at what percentage of stock currently offers a stamp duty free purchase for existing and first-time buyers and how this availability is set to change when stamp duty relief reverts back to previous thresholds as of April this year.
Currently, first-time buyers pay no stamp duty on any purchase up to £425,000, whilst existing homebuyers owe nothing on properties up to the value of £250,000. However, as of 1st April this year, current relief thresholds revert back to their previous levels, meaning that first-time buyers will pay stamp duty on the value of a home that exceeds £300,000, whilst stamp duty will be owed on properties valued above £125,000 for existing homebuyers.
The figures show that, currently, 253,287 of the 393,240 homes currently listed across the market boast an asking price of £425,000 or below – meaning that 64% of all listings offer first-time buyers the chance of a stamp duty free property purchase.
However, only 173,547 of total homes listed have an asking price of up to £300,000, equating to 44% of total market stock. This means that, as of 1st April, there will be almost 80,000 fewer properties for sale that would allow first-time buyers to climb the ladder without paying stamp duty.
Across London, almost a third – 31% – of homes currently listed for sale offer the chance of a stamp duty free purchase, with this figure falling to just 13% from 1st April.
Whilst first-time buyers are set to see a reduction in stamp duty free property availability, it is existing homebuyers who will be hit far harder in this respect.
Currently, 33% of all homes listed on the market have an asking price of £250,000 or below meaning that no stamp duty is owed by existing buyers. However, when this threshold reverts back to £125,000, the proportion of market stock offering a stamp duty free purchase will fall to just 8%.
Again, London buyers will see the proportion of market stock priced below stamp duty thresholds reduce from 31% today to just 13% as of 1 April.
The CEO of Yopa, Verona Frankish, commented: “As it stands, both first-time and existing homebuyers currently have a great degree of choice when it comes to the proportion of homes listed for sale and the ability to purchase them without being hit by a hefty stamp duty tax bill.
“Unfortunately, this won’t be the case from 1st April, with every region of England seeing a significant reduction in stamp duty free property stock, although the impact will certainly be greater in some regions versus others, with London homebuyers set to be hit particularly hard.
“So whilst this will mean that many homebuyers are forced to save even more to cover the cost of stamp duty, we’re also likely to see extremely high demand for the properties that remain under the reverted stamp duty thresholds.
“This means that those still hopeful of a stamp duty free purchase are likely to face fierce competition and this heightened demand will inevitably drive up prices in these price thresholds.”
Read the orginal article: https://propertyindustryeye.com/fewer-than-one-in-10-homes-will-be-free-from-a-stamp-duty-charge-from-april/
