Santander UK recorded a 130% increase in mortgage applications in the fourth quarter of 2024 compared with the same period a year earlier, as some home-buyers sought to potentially save themselves thousands of pounds in stamp duty costs.
From April, stamp duty discounts will become less generous, with the “nil rate” band for first-time buyers reducing from £425,000 to £300,000 and other home-buyers seeing a reduction from £250,000 to £125,000.
Stamp duty applies in England and Northern Ireland.
Santander estimates the average property purchase takes four months from a mortgage offer to completion, meaning that some people buying towards the end of last year will have maximised their chances of benefiting from lower stamp duty costs, ahead of the April 1 deadline.
Every penny counts
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 April 1.”
In the South East of England, where the average house price is £385,600, first-time buyers could potentially save up to £4,280 in stamp duty by purchasing before April 1, based on typical property values, Santander said.
In London, an average first-time buyer could end up paying over £11,000 more from April, it calculated. Based on an average house price of £535,700, Santander calculated that a first-time buyer faces paying £5,535 currently, compared with £16,785 from April.
Recent research for the bank by Opinium among 2,000 first-time buyers indicated they are increasingly compromising on location to fulfil their dream of owning a home.
Two-thirds (67%) of those who bought their first home in the past two years had never seen their new neighbourhood before buying, compared with just over half (51%) of those who bought more than five years ago.
