Purchasing a property is a hugely exciting experience but it can be challenging, particularly for first-time buyers.
From balancing your savings with everyday expenses, to making sense of market trends, the road to home ownership can feel overwhelming.
Unfortunately, proposed changes to stamp duty could make it even tougher to get on the property ladder in 2025.
These new rules, announced in last month’s Autumn Budget, are likely to raise costs in a way that will affect long-term affordability.
So, what exactly has changed, and how will it impact buyers in Plymouth?
Here, we break down the Chancellor’s property updates in the Autumn Statement and look at what they mean for first-time buyers and home movers alike.
A shift in Stamp Duty thresholds
The government has introduced changes to stamp duty that will come into effect from April 2025, lowering thresholds for both first-time buyers and home movers.
Until now, first-time buyers could purchase a property up to £425,000 without paying stamp duty, which provided valuable savings.
However, from April 2025, that threshold will drop significantly to £300,000. This reduction means that more properties will fall within the range where stamp duty is payable, pushing up costs for most buyers.
Home movers aren’t left out of the equation, either. While they currently enjoy a threshold of £250,000, allowing them to avoid stamp duty on properties up to this value, this too will be reduced, dropping to £125,000 in April 2025.
Home movers will also need to pay a 2% duty on the portion between £125,000 and £250,000, which means that they, like first-time buyers, may need to adjust their finances accordingly.
Paul Preen, Managing Director at Lang Town & Country, commented: “This recent shift in stamp duty policy has complicated the path to homeownership for first-time buyers here in Plymouth.
“For many, this tax has been a difficult obstacle to overcome, especially when factoring in rising property prices and the already demanding process of securing a mortgage.”
Why Stamp Duty matters
Stamp duty might seem like just another line on the list of home-buying expenses, but it is a significant one.
If you are a first-time buyer working with strict budgets, even a small increase in costs can feel monumental.
The current stamp duty system offers some leeway, especially for buyers purchasing properties below £425,000. However, with the changes coming into force in 2025, those who had hoped to avoid stamp duty by staying below that price point may find themselves reevaluating their options.
The tax system was initially designed to give a helping hand to those buying on the lower end of the market. But with these new policies, first-time buyers in particular may feel like their path to homeownership is getting steeper.
And in Plymouth, where prices have gradually risen in recent years due to the city’s growing popularity, these changes could push some buyers out of the market entirely.
What stamp duty changes mean for buyers in Plymouth
Plymouth has long been an attractive place for first-time buyers, offering a blend of beautiful landscapes, coastal charm, and a relatively affordable property market compared to larger UK cities.
However, as the city’s popularity has grown, so has its property market competition. First-time buyers looking for a piece of Plymouth’s unique community may now need to consider homes at lower price points or save more to handle the additional tax burden.
Paul Preen explains: “With Plymouth’s charm and the appeal of its location, the local market has seen steady growth in demand. But now, for first-time buyers, it’s going to be more challenging to secure that perfect property without paying a higher upfront cost.
“I encourage buyers to seek professional guidance to navigate these changing conditions, so they don’t miss out on available opportunities.”
From April 2025, the stamp duty threshold will reduce from £250,000 to £125,000, with the first-time buyer threshold dropping from £425,000 to £300,000.
This means that more properties will now be subject to stamp duty, making mortgage affordability an even more crucial consideration.
For those hoping to buy a property in Plymouth, this change means a heavier reliance on savings and a potential rethink of their ideal budget.
What Stamp Duty reliefs look like now
At the moment, first-time buyers still benefit from a raised stamp duty threshold, paying nothing on properties costing up to £425,000.
They do, however, pay 5% on properties between £425,000 and £625,000, and for properties costing over £625,000, standard stamp duty rates apply.
From April 2025, these benefits will shift. First-time buyers will pay 5% on the portion of the property price between £300,000 and £500,000.
While this may seem minor, for buyers who’ve been counting on avoiding additional fees, it could mean extra planning.
For home movers, the current threshold of £250,000 stays in place until April 2025. But from then on, it drops to £125,000, with a 2% stamp duty required on the portion between £125,000 and £250,000.
And for homes costing over £250,000, buyers will pay 5% on the portion up to £925,000, 10% on the portion up to £1.5 million, and 12% on any portion over £1.5 million.
Steps for first-time buyers to prepare for the future
What do these changes mean for buyers in Plymouth? For one, you should plan to adapt your financial strategies.
Here are some steps you can take as a first-time buyer to stay ahead of the new stamp duty regulations and keep your property dreams in focus:
- Do the math – Knowing the potential impact of the new stamp duty can help you adjust your savings plan. Work out what you’ll need under the 2025 rules to avoid surprises.
- Focus on affordability – Talk to a mortgage adviser to assess your options. Mortgage affordability is critical, especially as lenders consider stamp duty and other upfront costs.
- Consult the experts – Our Lang Town & Country team can offer insights on timing and strategy. We’ll guide you through options to make your move as cost-effective as possible.
- Explore price options – Keep an open mind about the areas and types of properties you’re considering. Plymouth offers diverse housing options, and it might be worth exploring neighbourhoods slightly outside your initial target area.
What’s happening in the Plymouth property market?
Plymouth’s property market is evolving, and first-time buyers and home movers alike need to be prepared.
While the path to homeownership is changing, with the right preparation and guidance, buyers can still find success.
It may take a bit of creativity, a strong savings strategy, and expert advice, but the rewards are well worth the effort.
For those hoping to buy a home in Plymouth, knowing these rules and consulting local property experts can make all the difference.
I’m thinking about buying my first home. What’s the first step?
If you’re a first-time buyer in Plymouth, our Lang Town & Country team is here to guide you.
To get you started, here are 10 questions you need to ask as a first-time buyer.
If you’d like some more advice, please do get in touch using the contact details below:
Plymouth Sales – 01752 256000 / Property@langtownandcountry.com
Plymstock Sales – 01752 456000 / Plymstockoffice@langtownandcountry.com
Waterside – 01752 200909 / Waterside@langtownandcountry.com
Lettings – 01752 201010 / enquiries@langtownandcountry.com
Land & New Homes – 01752 278499 / newhomes@langtownandcountry.com
