If you are looking for houses for sale in London then you’ll be glad to hear the market has become less competitive in recent weeks. That’s because the race to make the most of the Stamp Duty reductions is over – on April 1 this year to be exact. That’s when stamp duty taxes reverted to standard charges again.
In September 2022 the government at the time ruled that no Stamp Duty Land Tax (SDLT) was due on properties up to £250,000 in England and Northern Ireland.
First-time buyers were also given relief when the SDLT threshold was increased from £300,000 to £425,000. When it came to houses for sale in London, the maximum value of a first-time buyers’ property that qualified for SDLT relief was also increased under the Stamp Duty Land Tax (Reduction) Bill -from £500,000 to £650,000. In total, the changes gave first-time buyers looking at houses for sale in London savings of up to £11,250. No SDLT relief was given to properties worth more than £250,000.
From 1 April this year however, the zero percent threshold fell back to £125,000. At the same time, the first-time buyers’ threshold reverted to the original £300,000. Current rates for SDLT in England and Norther Ireland are as follows:
£0-£125,000 (£300,000 for first-time buyers) pays no SDLT
£125,001-£250,000 buyer pays 2%
£250,001-£925,000 buyer pays 5%
£925,001-£1.5m buyer pays 10%
£1.5m+ buyer pays 12% SDLT
With the SDLT relief for houses for sale in London ending on March 31, it meant, of course, that the number of properties sold in the capital in March was artificially high. Data from Knight Frank shows it was 17 per cent higher than in March 2024.
Having said that, the Stamp Duty race didn’t affect the London prime residential market as much, due to the fact that SDLT savings in the higher property bracket were proportionally lower. In fact, the average cost of property in Prime Central London (PCL) fell by 0.7 per cent in the first three months of this year. It was the biggest fall since January 2024.
It was a different story for property in the Prime Outer London. There, prices jumped by 1.5 per cent in March. It was an increase for the second month in a row.
Property analysts though aren’t putting too much store on the recent property prices for houses for sale in London. Nor are they overly worried about the way the market performed in the first three months of the year.
A spokesman for Knight Frank described the period from January to March as being “marked by uncertainty and volatility.” He went on to say that he believed the situation would even itself out by summer and for the rest of this year.
Other economic concerns are on the horizon and which could have an effect on the property market. These are mainly the tariffs introduced by the current US government. In the UK it’s 10 per cent on exports, which could have an effect on inflation, making a cut in mortgage interest rates less likely.
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