Those taking their first step on the property ladder accounted for 64% of home mover activity in December, according to the reallymoving comparison site, which said this figure is a record high.
Meanwhile, in January first-time buyers made up 63% of the market, despite affordability challenges plaguing would-be homeowners.
It is thought lower mortgage rates and the looming stamp duty holiday deadline have spurred on many first-time buyers who might otherwise have held off.
Indeed, from 1 April the new stamp duty thresholds will be introduced which mean only those first-time buyers purchasing properties less than £300,000 will be exempt from paying stamp duty. Currently the threshold is at £425,000.
If the price of the first-time buyer’s property is £300,000 or more they will pay 5% tax on the proportion above this amount. You can find out more about the changes in our article on stamp duty hikes.
Reallymoving said following the changes the proportion paying the tax will more than double from 17% currently to 40%.
With the typical first-time buyer property in England being £293,174, it may look on paper as though there will be no stamp duty to pay for those buying their first property.
But for first-time buyers purchasing properties at above average prices, they will be pushed through the stamp duty exemption ceiling.
Reallymoving said the proportion of first-time buyers paying stamp duty will rise in every region of the UK with those in London and South East most heavily impacted.
Indeed, in London first-time buyers pay £438,442 on average, therefore stamp duty bills will jump by £6,250 from £672 to £6,922, according to reallymoving, with the proportion paying the tax increasing from 46% currently to 79%.
In the South East, where buyers pay £330,441 on average to secure a first home, average bills will rise from zero to £1,522 – pulling 56% of first-time buyers over the tax threshold.
Rob Houghton, founder and CEO of reallymoving, said: “First-time buyer activity increased sharply from October through to the end of last year, and has stayed high into January. The prospect of higher Stamp Duty bills is undoubtedly a factor, with savings of over £6,000 up for grabs if first-time buyers in London can complete before the deadline, and over £1,500 in the South East.
“The homebuying process continues to take much longer than it used to, and conveyancers have a very busy and stressful few weeks ahead of them, so many first-time buyers will end up disappointed.
“If you’re buying at over £300,000 and you’re not already well advanced in the conveyancing process, don’t just hope for the best. Make absolutely sure you have flexibility in your budget to accommodate higher bills.”
