The government announced the SDLT will only be payable on property purchases over £250,000. First-time buyers will only pay the tax on purchases starting at £425,000. Overall this will save the average homebuyer £2,500, while first-time buyers are likely to save up to £8,750.

How will these changes impact the market?

Sold price data for the 574,091 homes purchased over the last year was analysed by Benham and Reeves. The level of stamp duty that was owed was then compared to the total that would have been owed under the new guidelines. 

The findings show that £5.839 billion worth of stamp duty was paid by the 574,091 homebuyers who purchased a home in England last year.

If the stamp duty cut was present during this time they would have made a potential saving of almost £1.029 billion per year.

Regional stamp duty cut reductions

Buyers in the South East could save the most cash as the latest cuts reduce the stamp duty owed by £227.6 million a year. 

Homebuyers across the capital could see the total level of stamp duty on an annual basis fall by £147.7 million. East of England is also estimated to see homebuyers enjoy a saving of £144.9m.

Some of the lowest potential savings could be seen across the North East as savings of £24 million a year would be made under the stamp duty cut.

Director of Benham and Reeves, Marc von Grundherr, commented: “Any saving will be warmly welcomed for those looking to climb the property ladder, particularly in the current economic climate and, collectively, the nation’s homebuyers stand to save a significant sum as a result of the latest stamp duty changes.”

“But today’s cut is fairly insignificant in the grand scheme of things and will do little to help homebuyers overcome the huge initial hurdle of saving that all important mortgage deposit.” 

“In fact, it’s fair to say that it will only add to the problem by fuelling demand and pushing house prices higher, while the government maintains a head in the sand approach to housing delivery.”