Cost of moving rockets after surge in stamp duty

Yahoo

21-04-2025

The cost of moving house has jumped by 45pc in the past five years and is set to spiral further following an increase in stamp duty this month.
Taxes, fees and surveys cost the average homebuyer in the past year £13,530, according to Barclays, up from £9,337 before the pandemic.
It comes as the stamp duty discount expired at the end of March, cutting the threshold at which movers pay the tax from £250,000 to £125,000. First-time buyers now pay the levy on homes costing more than £300,000, not £425,000 as before.
It means a typical first-time buyer in London will have to pay almost £7,000 more in stamp duty than they did a month ago.
The number of mortgage completions jumped by 50pc in March compared to the same month a year ago, Barclays said, as buyers raced to make their purchases before the higher tax rate kicked in.
Stamp duty raked in an estimated £13.5bn for the Exchequer in the last financial year, and the Office for Budget Responsibility expects the annual haul to rise to £24.5bn by the end of the decade.
The extent of the tax – which costs £5,000 on the purchase of a £300,000 home, rising to £15,000 for a property worth £500,000, and £43,700 for anyone buying a £1m house as their only property – is so severe that a quarter of homeowners say it is the main barrier to moving.
That share rises to 40pc for buyers in Generation Z, those born in or after the mid to late 1990s.
Changing rules on taxes mean that one third of homeowners do not know how much stamp duty they would have to pay if moving, the bank found. Meanwhile 40pc are unaware of the cost of legal fees.
Council tax and energy bills are also rising, as are rents and the interest payments on mortgages for those refinancing on to higher rates from fixes obtained before borrowing costs shot up during the cost of living crisis.
Three quarters of those surveyed said their housing costs were rising.
Rising taxes are among the factors hammering sentiment in the economy, with confidence in household finances declining and 40pc of households adjusting their monthly spending to cope with housing costs, Barclays said.
Jatin Patel, of Barclays, said: 'For existing homeowners and renters the shift in sentiment reflects the cautiousness felt across the economy as a whole, as consumers are concerned about rising bills and the prospect of global tariffs impacting their wallets.
'Housing consumes a significant portion of income, particularly for renters.
'With four in 10 adjusting their spending to meet their housing costs, it's clear that the financial pressures of maintaining a home are intensifying at a time where people face a delicate balance between their essential spending and long-term financial goals.'
A Treasury spokesman said: 'We are taking decisive action to deliver 1.5m homes as part of our Plan for Change, including a £2bn boost to the Affordable Homes Programme and introducing a permanent and comprehensive mortgage guarantee to support families into safe and decent homes.'
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