WHAT TO DO IF YOU’VE MISSED THE STAMP DUTY DEADLINE - OUR ADVICE FOR FIRST TIME BUYERS

On 1 April 2025, changes to Stamp Duty Land Tax (SDLT) came into effect, impacting buyers across the UK. If you were hoping to complete your property purchase before the deadline but missed it, you may now be facing an unexpected financial burden. So, what are your options? As a leading conveyancing firm, we are here to guide you through your next steps.

Assess your options

If you are a first-time buyer (FTB) who just missed the deadline and now has to pay the higher rate of Stamp Duty, you realistically have two main options:

Renegotiate the price  - If you still want the property, and exchange has not taken place, it is certainly worth attempting to renegotiate the price with the seller. Many sellers may be open to this because if you pull out, they will have to remarket the property, which could mean paying abortive legal fees and facing a delay of another 3-4 months. There is also no guarantee they will secure the same price again. Of course, there is the chance that the seller will not agree to a reduction, but at least you have explored that option before pulling out.

Withdraw from the purchase - If the additional tax makes the purchase unaffordable and renegotiation fails, pulling out of the deal may be your only choice. While this is a tough decision, it might be better than stretching beyond your financial limits.

The increased costs

Under the new regulations, the SDLT thresholds have been adjusted as follows:​

-        First-Time Buyers: The "nil rate" band has decreased from £425,000 to £300,000. ​

-        Home Movers: The zero-rate threshold has been reduced from £250,000 to £125,000. 

This means that FTBs purchasing properties above £300,000 now face higher SDLT liabilities. For instance, a property purchased at £350,000 would have previously incurred no SDLT. Post-deadline, the SDLT is calculated as follows:​

0% on the first £300,000 = £0​

5% on the remaining £50,000 = £2,500​

Total SDLT payable: £2,500​

This represents an additional financial burden that buyers must now account for in their budgeting.​

Impact on the housing market

We believe that rather than cooling, the market has actually remained quite stable and will continue to do so, largely due to mortgage rates beginning to fall. The biggest factor affecting demand was rising interest rates, but now that they have stabilised, buyers remain active.

At the same time, we are seeing an increase in landlords selling off rental properties due to tax and regulatory changes introduced by the Renters Rights Bill. This has created even more competition in the rental market, driving prices higher and making homeownership an even more attractive option. Many people would rather invest in their own property than continue paying off someone else’s mortgage through rent.

We do not anticipate a major drop in property prices, as the changes to Stamp Duty do not affect all buyers equally, particularly in regions where property prices are lower. While the increased costs may present a challenge, they are unlikely to be significant enough to deter those who are highly motivated to buy. As long as interest rates remain steady and there are no major economic shocks, we expect demand to remain strong, with the potential for prices to continue rising.

How PCS Legal can help

At PCS Legal, we understand how stressful unexpected costs can be, especially when buying your first home. Our expert conveyancers can:

-        Guide you through your options

-        Help assess the financial implications of proceeding with your purchase

-        Offer tailored legal advice on contract terms and withdrawal options

Missing the Stamp Duty deadline does not have to derail your homeownership plans. Contact us today for professional guidance and support in navigating this change.