The Government is being urged to keep the first-time buyer Stamp Duty relief threshold at its current level.

Labour signalled before it won the General Election that it would lower the threshold back from £425,000 to £300,000 from April 2025.

Research by Rightmove shows only 37% of homes for sale would be eligible for the relief if the threshold drops. That compares with 58% of current listings.

The South West & East of England would be most impacted by the change, while the North East would be the least impacted, the portal said.

In London, fewer than one in 10 homes will be free from a Stamp Duty charge to first-time buyers in April 2025 if the old thresholds return, compared with a quarter now, according to the research.

Since 2010, the average asking price of a home has risen by 62%, from £230,592 to £373,493. If purchasing a home at the current average asking price, a first-time buyer will pay £3,675 in stamp duty in 2025, compared with nothing now, Rightmove warns.

Rightmove has backed Government plans for first-time buyer support and to build more homes but has proposed that there is an opportunity to go further by retaining the existing Stamp Duty thresholds. 

The portal also suggests that a government review of mortgage affordability criteria and support for lender product innovations would help identify and potentially create more options for a greater number of first-time buyers, helping them to both borrow enough, and save up a large enough deposit. 

Tim Bannister, Rightmove’s property expert, said: “The housing market is made up of many connected pieces – as owning your first home becomes more difficult, some people rent for longer, which places an additional strain on the rental sector. 

“Stamp Duty is a barrier to movement, and keeping the existing thresholds seems like a logical step to providing some first-time buyer support. Even greater Stamp Duty reforms in the future could have wider implications, such as helping those who are considering downsizing.”

Agency trade body Propertymark has backed these calls.

Nathan Emerson, chief executive of Popertymark, said: “Cutting Stamp Duty helped many buyers take their first step onto the housing market during the pandemic.

"At a time where house prices remain unrealistic and challenging for many people, it is an important part of the process that the new UK Government looks to help people enter the housing market and retains the Stamp Duty threshold. But there needs to be a raft of other measures to stabilise house prices too.

"The new UK Government should also look at introducing a new scheme to replace Help to Buy, which helped many first time buyers step onto the housing ladder, which is becoming more unaffordable without such assistance measures.”

Via @EstateAgentToday