Budget: Stamp duty threshold increased for first-time buyers and homemovers

In addition, the value of property that first-time buyers can claim relief on will increase from £500,000 to £625,000.

The cut in stamp duty is expected to save first-time buyers an extra £5,000 on average.

Speaking during the Budget, Kwarteng said that "homeownership is the most common route for people to own an asset" and confirmed that the changes are permanent and will apply from today.

Kwarteng said the measures will take an extra 200,000 buyers out of paying stamp duty altogether.

Stamp duty was last cut during the pandemic, raising the threshold temporarily to £500,000 in a move to help stimulate the property market.

Data from Rightmove shows that 45% of homes on the market are currently exempt from stamp duty for first-time buyers and 7% are exempt from stamp duty for all home-movers (excluding second homes, anything £125,000 or below).

The average stamp duty that a home mover pays is currently £8,258, based on the average asking price of £365,173.

Esther Morley, managing director of specialist residential at LendInvest, said: “The permanent changes to stamp duty aimed at reducing the financial burden on home movers and first-time buyers is welcomed. For downsizers, this will likely enable a freeing of the housing chain as the older generation are more able to consider a realistic move, releasing much needed stock into the market.

"However, the impact of this will need to be considered against the backdrop of mortgage affordability. With the cost of living still on an upwards trajectory, many borrowers will still face challenges securing the right mortgage to support their ambition."

Rich Horner, head of individual protection at MetLife UK, commented: “Among the range of policies, today’s stamp duty cut would’ve been most welcomed by first-time buyers and those already in the process of moving. However, whether this is just a short-term fix to a longer-term problem isn’t clear. Homeowners are stuck between a rock and a hard place right now. Mortgages are one of the biggest financial commitments people make. And yet, our research revealed a worrying 46% of homeowners have no mortgage protection whatsoever, at a time when so many are highly concerned about their ability to make necessary repayments.

“With affordability at the forefront of people’s minds, families will be looking for ways to prevent them from being financially vulnerable.” 

Scott Clay, distribution development manager at Together, added: “As part of the flurry of tax cuts, scrapping stamp duty now has been met with mixed reactions. We of course recently saw a stamp duty cut during the pandemic, but doing this now, at a time of rising borrowing costs and record unaffordability, means it's happening in a very different environment than in the summer of 2020. The stamp duty cut will reduce the sky-high costs of buying a home, and ultimately provide needed support for first-time buyers and those who are looking to move soon, however whether this goes far enough to tackle the long-term issues within the market isn’t clear. With that said, this move will likely have a tempering effect, helping the housing market weather a slow down.”