The recent announcement by the Chancellor to end the stamp duty holiday next April has significant implications for first-time buyers and the housing market. Starting April 1, the nil rate for paying stamp duty on a home will drop from £250,000 to £125,000, and the threshold for first-time buyers will fall from £425,000 to £300,000.
This means that many buyers will need to find thousands of pounds extra to cover the increased tax.
For example, first-time buyers in London purchasing an average-priced house at £531,212 will need an additional £11,250.
This change is expected to cause a rush in property purchases as buyers try to complete transactions before the new rates take effect.
Industry experts warn that while the short-term effect might boost the housing market, the long-term impact could be challenging, especially for first-time buyers who will face higher costs. The decision not to extend the stamp duty cuts introduced by former Prime Minister Liz Truss could dampen the recent revival in the property market spurred by lower interest rates.
As the deadline approaches, estate agents and solicitors are preparing for a busy period, reminiscent of the property boom seen during the pandemic when similar stamp duty breaks were in place.
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