Research from Leeds Building Society reveals 37% of first time buyers face a Stamp Duty bill

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  • New analysis1 from Leeds Building Society shows that an additional 21% of first time buyers in England will be subject to stamp duty land tax under new limits.
  • Following rule changes on Tuesday, more than 102,000 first time buyers face paying stamp duty, almost 60,000 extra compared to the current rules.
  • The biggest increase in first-time buyer purchases expected to be subjected to the tax is in London where 85% of transactions will be affected, followed by the South East region.
  • Leeds Building Society’s Income Plus mortgages allow first-time buyers to borrow more while responsibly assessing their ability to repay.

Leeds Building Society estimates that an additional 21% of first time buyers in England face paying Stamp Duty when a freeze on thresholds is removed next week.

Currently, first-time buyers pay stamp duty on homes costing more than £425,000 but from 1 April that will reduce to £300,000.

The Society has assessed 2024 market-wide mortgage data and projects that an additional 59,400 annual home purchases are projected to become subject to the tax in England, alongside 43,000 purchases where taxes will be higher.

The changes mean that 85% of first time buyers in London would be subject to the charges, along with 55% in the South East, 49% in the East of England, 30% in the South West, 16% in the West Midlands, 15% in the East Midlands, 13% in the North West, 9% in Yorkshire and the Humber, and 6% in the North East.

Leeds Building Society’s Income Plus mortgage range includes improvements in assessing how much borrowers can afford to repay, resulting in first-time buyers being able to borrow up to £66,000 more2 on average.

Aspiring homeowners with a minimum household income of £40,000 could be able to borrow up to 5.5 times their earnings, compared to 4.5 times on its standard lending. This means the average first time buyer could borrow a maximum of £356,000 through Income Plus compared to £290,000 under standard lending.

Matt Bartle, Director of Mortgages Leeds Building Society, said: “We all know the value that having a place to call home can add to our lives. As a mutual, we were set up 150 years ago to help people own their own home and save for their future, creating a sense of belonging in communities across the country.

“This new analysis highlights the impact that changes to stamp duty will have on aspirational homeowners. We’ll continue to do everything we can to put homeownership within reach of more people, generation after generation.”

Discussing the housing market more broadly, Martin Temple, Economist at Leeds Building Society, said:

“We are seeing activity above the expected level at this time of year, as buyers look to complete on any purchases ahead of the changes to Stamp Duty Land Tax at the beginning of April.

“Although the outlook for the housing market remains broadly positive, with expected reductions in interest rates later this year, these changes represent another barrier for first time buyers in the most unaffordable parts of the country.”

Ends

For more information, please contact the press office at pressoffice@leedsbuildingsociety.co.uk or call 07552 959546.

About Leeds Building Society

  • Leeds Building Society is the UK’s fifth-largest Building Society with assets of £31.6bn and a total membership of 991,000 as at the end of December 2024.
  • The Society’s purpose is putting home ownership within reach of more people, generation after generation.
  • It continues to do today what it was set up to do in 1875 – help people save money and buy their own home. The Society operates as a mutual, developing and innovating its product range and service offer to help members achieve their financial goals.
  • The Society won the title of Best Shared Ownership Mortgage Lender in the 2024 What Mortgage Awards, its ninth consecutive year of success in this category.
  • The Society employs over 1,800 colleagues, with a head office in the centre of Leeds, a customer contact centre in Newcastle and a network of 51 branches across the UK.
  • The Society has been a Living Wage employer since 2019.
  • The Society is committed to the orderly transition to a greener, net zero economy by 2050 and has set a second ambitious target to reduce our scope 1 and 2 location-based emissions by 60% by 2030, aligning with the UK’s net zero commitments.
  • For more on what we do and how we help our members, visit Leeds Building Society.

1Source: CACI’s MMDB, New Business, Jan – Dec 2024.

2Based on typical applications to the Society since December 2024. These examples are illustrations only and mortgage affordability is assessed on an individual basis.