“First time buyers are already facing significant challenges, from higher mortgage costs to rising rents while they save,” said Colleen Babcock, highlighting the difficulties many new homeowners are experiencing in the current market.
Recent adjustments to stamp duty in England have exacerbated these challenges, with first-time buyers seeing an average increase of £4,618 in their stamp duty costs. The threshold for first-time buyers was reduced from £425,000 to £300,000, significantly impacting affordability.
According to estimates, first-time buyers collectively paid an additional £307 million in stamp duty over the past twelve months compared to the previous year. The total stamp duty bill reached £408 million, a stark increase from £101 million during the preceding period.
Geographically, the impact of these changes has not been uniform. 53% of the total stamp duty collected since the threshold reduction came from London, while the South East contributed 23%. In contrast, the North East accounted for just 0.3% of the total.
More than three-quarters of first-time buyers have purchased properties exceeding the new £300,000 threshold this year, indicating a shift in the market dynamics.
Industry experts have voiced their concerns regarding the implications of these changes. “These figures underline the increasing strain on first time buyers, with higher stamp duty costs adding to already significant affordability challenges,” stated Nathan Emerson.
Aneisha Beveridge added, “Stamp duty is increasingly becoming another barrier for would-be homeowners, particularly at a time when first-time buyers are also having to save hard for a deposit amid high rents and rising living costs.”
In response to the growing challenges, the EMI scheme was expanded to support around £100 million of additional investment a year, with significant changes to its structure. The gross assets test for the EMI scheme was quadrupled from £30 million to £120 million, and the employee limit was doubled from 250 to 500.
Rachel Reeves remarked, “I am backing business with a more active state that’s making big commitments to industry,” indicating a push for more supportive measures amidst the rising costs.
The stamp duty changes were implemented after temporary relief ended in April 2025, marking a significant shift in the housing landscape for first-time buyers in England.
