Stamp duty in the UK is set to change significantly from the 1st of April 2025, with first-time buyers facing increased costs when purchasing property in the capital. Being a London based mortgage advisor ourselves, we are particularly interested in how stamp duty in London will change for our clients. According to new research from Mojo Mortgages, the upcoming stamp duty changes will see an average increase of £6,408 across all London boroughs, making it a lot more expensive for first-time buyers to get on the property ladder. In this blog I will go through the research carried out by Mojo and also offer Oportfolio’s own insights on the data.
How Will Stamp Duty in London Change in 2025?
Currently, first-time buyers in England benefit from a 0% Stamp Duty Land Tax (SDLT) threshold on properties valued up to £425,000. However, from the 1st of April 2025, this will decrease to £300,000, meaning that more buyers will need to pay stamp duty on their property purchases. The revised structure will work as follows:
- Properties priced up to £300,000 – No stamp duty.
- Properties priced between £300,001 and £500,000 – Taxed at 5%.
- The maximum property value eligible for first-time buyer relief will drop from £625,000 to £500,000.
These changes mean that thousands of first-time buyers will pay stamp duty for the first time, significantly increasing the cost of purchasing a home in London.
Which London Boroughs Will Be Most Affected By Stamp Duty Changes?
The stamp duty increases vary across London boroughs, with some areas seeing particularly steep rises. According to Mojo Mortgages’ research:
- First-time buyers in 15 boroughs, including Barnet, Brent, Ealing, and Hackney, will face the maximum increase of £11,250.
- Those purchasing in Havering, Bexley, and Croydon, who previously paid no stamp duty, will now owe £11,150, £10,300, and £10,150 respectively.
- Even in Barking and Dagenham, where house prices are lowest (£344,000 on average), buyers will see stamp duty of £7,200 introduced for the first time.
- In high-value areas like Kensington and Chelsea, the increase is more modest at £2,500, but total stamp duty costs remain high at £50,750.
- Westminster will have the highest stamp duty for first-time buyers at £33,300 after the changes take effect.
What Does This Mean for First-Time Buyers?
The increase in stamp duty costs in London could make it more difficult for first-time buyers to afford a deposit and overall property costs. With the stamp duty holiday long behind us, many will now have to factor in additional thousands of pounds in tax payments when budgeting for their new home.
Louis Mason, Marketing and Communications Director at Oportfolio Mortgages, commented: “These stamp duty changes represent a significant challenge for first-time buyers in London. With the threshold for exemptions reducing and property prices remaining high, it’s more important than ever to plan your finances carefully. We strongly advise buyers to seek expert mortgage advice to ensure they are financially prepared for these upcoming costs.”
How Can First-Time Buyers Prepare?
If you’re planning to buy a property in London in 2025, here are some key steps to take now:
- Understand your stamp duty costs – Use an updated stamp duty calculator to see how much you’ll need to pay.
- Save a larger deposit – With increased tax costs, budgeting ahead is essential.
- Consider alternative locations – Some boroughs will see smaller increases, making them more affordable for first-time buyers.
- Seek mortgage advice – Consulting with an expert mortgage broker like Oportfolio Mortgages can help you navigate the changes and find the best deals.
Get Expert Mortgage Advice Today
With major changes coming to stamp duty in London, it’s crucial to plan ahead and make the right decisions without having a large unexpected tax bill! Whether you’re looking to buy now or in the future, Oportfolio Mortgages is here to help you find the best mortgage deals and guide you through the process. Contact Oportfolio Mortgages today to get expert advice and start your home-buying journey.
