Homebuyers paid £1.1bn in stamp duty last month, up 24% on the £848m paid in January, as buyers rushed to beat the fast-approaching stamp duty increase, fresh analysis of the latest HMRC figures reveal.
Property buyers have just over a week until 1 April, when the nil-rate threshold, under which no stamp duty is paid, drops from £250,000 to £125,000, returning to where it was before temporary changes were made in 2022.
It will increase the tax bill on the average-priced home in England from £2,028 to £4,528.
First-time buyers have a higher threshold, but this will also drop from £425,000 to £300,000.
The average first time buyer home in London is £473,282, meaning the stamp duty bill for a typical first time buyer in London will increase from £2,414 to £8,664, according to Coventry Building Society, which carried out the research.
Jonathan Stinton, head of mortgage relations at Coventry Building Society, commented: “Buying a home is about to get a lot more expensive. Those in the middle of the buying process will be racing against time to beat the deadline.
“Those who can’t get the keys to their new house in the next ten days need to brace themselves for a hit, potentially amounting to thousands of pounds.
“The pressure of the deadline will be felt by buyers across the market, with some having to make tough financial decisions in the weeks ahead.”
With thousands of buyers struggling to get deals over the line before the 1 April deadline, owing in part to conveyancing delays, some agreed deals will almost certainly fall through over the next few weeks, according to Jeremy Leaf, north London estate agent.
“There is no question that many people brought forward their purchases in order to take advantage of the stamp duty concession before it became impossible to do so at the end of this month,” said Leaf.
“Of course, those who don’t make the deadline may have an opportunity to make a similar saving if the vendor is minded to move on the price, depending of course on their ongoing purchase,” he added. “But some will fall by the wayside and the tax take is almost inevitably likely to fall, at least for the first few months until the market finds a new normal.”