What you need to know about the Stamp Duty Changes

Friday 14 March, 2025

The UK property market is experiencing a significant surge in buyer activity as individuals strive to complete property purchases before the impending changes to Stamp Duty Land Tax (SDLT) on 1 April 2025. This rush is particularly pronounced among first-time buyers, who stand to be most affected by the revised tax thresholds.

Upcoming Changes to Stamp Duty

Currently, first-time buyers benefit from an SDLT exemption on properties valued up to £425,000. However, from 1 April 2025, this threshold will decrease to £300,000.

For properties priced between £300,001 and £500,000, a 5% SDLT rate will apply to the portion exceeding £300,000. Additionally, the general SDLT-free threshold will revert from £250,000 to £125,000, affecting all homebuyers.

Impact on the Property Market

Anticipation of these changes has led to heightened activity in the housing market. In February, UK house prices rose by 0.4%, marking the sixth consecutive month of increases and bringing the average house price to £270,493.

This uptick is largely attributed to buyers rushing to complete transactions before the new SDLT rates take effect.

Stamp Duty Timeline

To avoid paying higher stamp duty charges in the UK property market, you need to complete the following steps before the end of March 2025:

Exchange Contracts by 17th March: Ensure that you exchange contracts by 17th March 2025. This is crucial because it typically takes around 14.5 days to move from the exchange of contracts to completion.
Complete the Purchase by 31st March: Make sure the legal completion of your property purchase happens by 31st March 2025. This is the final step where the property ownership is transferred to you.

Mortgage Application Timeline

Securing a mortgage is a critical step in the property purchase process, and timing is of the essence for those aiming to meet the 31 March deadline. The mortgage application process typically involves several stages:

Mortgage Appointment and Application: This stage can take approximately two hours, but preparing necessary documentation in advance can expedite the process.
Home Valuation: This process can take around two weeks, as it involves scheduling the valuation, conducting the survey, and reviewing the report.
Decision: Once all assessments are complete, the lender will decide on your mortgage application. This stage can take up to four weeks.

Given these timelines, initiating your mortgage application as early as possible is crucial to ensure completion before the SDLT changes.

How Lonsdale's Mortgage Broker Team Can Assist

Navigating the complexities of mortgage applications under tight deadlines can be challenging. Lonsdale's experienced mortgage broker team is equipped to provide tailored guidance and support throughout the process. Our advisors can assist in:

Expediting Mortgage Applications: Leveraging our industry expertise to streamline your application and liaise effectively with lenders.
Financial Preparation: Offering advice on improving your credit score and organising necessary documentation to enhance your application's success.
Market Insights: Providing up-to-date information on market trends and SDLT implications to inform your purchasing decisions.

By partnering with Lonsdale, you can navigate the mortgage process more efficiently, potentially helping your chances of completing your property purchase before the SDLT changes come into effect.

In Summary

The forthcoming adjustments to SDLT thresholds are prompting a rush among homebuyers to finalise purchases by 31 March 2025. Understanding the mortgage application timeline and acting promptly are essential steps in securing favourable tax rates.

Lonsdale's mortgage broker team stands ready to assist you in this endeavour, ensuring a smoother journey to homeownership amid these regulatory changes.

Please note: As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments. This article is for information only and does not constitute advice. The Financial Conduct Authority does not regulate tax planning. Levels, bases and reliefs from taxation may be subject to change.