Santander said it had received the surge in applications between the end of 2023 and the end of 2024 as buyers made the most of the reduced tax thresholds before they increase on 1 April.
It’s no wonder there has been an increase in people taking out mortgages as there are big savings to be made by buyers who purchase before the changes to stamp duty.
Under the current stamp duty rules, first-time buyers are exempt from the tax on property payments under £425,000. Meanwhile other buyers do not pay stamp duty on up to £250,00.
But from 1 April, first-time buyers will see the threshold at which they pay tax fall to £300,000 whilst other buyers will have to pay tax on anything above £125,000.
From April a first-time buyer purchasing a home priced between £300,000 and £500,000 will face a 5% stamp duty charge on an additional £125,000 of borrowing, adding thousands of pounds to the overall cost.
All other buyer types will pay 2% on the amount between £125,000 and £250,000 – a potential extra cost of up to £2,500.
The impact will be felt the most by first-time buyers in places where house prices are higher, such as London and the South East of England.
Santander said in the South East, where the average house price is £385,600, first-time buyers could save up to £4,280 in stamp duty by purchasing before 1 April.
Meanwhile, in London, where property prices are highest at £535,700, the potential saving rises to £11,2501
With Santander estimating the average property purchase takes four months from mortgage offer to completion, buyers securing a mortgage offer before the end of 2024 will have maximised their chances of benefitting from lower stamp duty costs, ahead of the 1 April 2025 deadline.
Graham Sellar, head of intermediary channel – mortgages, at Santander, said: “We all know that buying a home – whether it’s our first or our forever home – comes with significant costs.
“Every penny counts when considering things like legals and removals costs, so it’s great to see so many people make the most of the holiday and secure their new home ahead of 1 April.”
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