October 2024 Budget
The UK government’s latest changes to stamp duty land tax (SDLT) in the October 2024 Budget are set to reshape the property market, with implications for anyone looking to make a property purchase.
Larger deposits
Where mortgage customers are unable to borrow their stamp duty as a part of their loan it may mean that they will need to borrow more.
As such the solution is to reduce the down payment. This would mean there is access to more cash for the total deposit required including down payment, solicitors fees and stamp duty land tax. The extra borrowing makes more cash available for the extra cost. But potentially could impact the rate and monthly cost of living.
Figures
For example (see below) the scenarios of how much SDLT will cost based on different buyer types at different values:
| Value |
First time buyer now |
First Time buyer 01/04/2025 |
Home mover now |
Home mover 01/04/2025 |
Additional property now |
Additional property 01/04/2025 |
| £225,000 | £0 | £0 | £0 | £2,000 | £11,250 | £13,250 |
| £325,000 | £0 | £1,250 | £3,750 | £6,250 | £20,000 | £22,500 |
| £425,000 | £0 | £6,250 | £8,750 | £11,250 | £30,000 | £32,500 |
The number of purchase applications has increased since Dec 2023 and the above table illustrates that we could expect to see even more purchases now considering the further changes in April 2025 to SDLT.
Commentary
The uplift in property purchase activity as well as the Bank of England base rate change could be a recipe for positivity for anyone looking to buy with the assistance of mortgage finance.
That said, the tax changes have broader implications for the buy-to-let market. From 31st October 2024 the stamp duty has increased from 3% to 5% when purchasing a property that will increase your interest in property by one. The government has taken the view that increasing the surcharge has the potential impact of supporting residential home buyers.
Ultimately, while stamp duty changes may provide some immediate relief, prospective buyers should ensure they are well-informed about how these changes interact with other factors—like their LTV ratio and the overall affordability of a mortgage—before committing to a purchase.
Contact Hawke FS to discuss more
If you require personal advice, please do not hesitate to contact a member of our friendly team here at Hawke as soon as possible.
You can speak with us on 0208 660 8613.