Bristol home buyers race to beat stamp duty rise

Bristol’s housing market is buzzing as homebuyers scramble to finalise purchases before the looming stamp duty changes which are due to take effect in less than a month.

The Autumn Budget, unveiled by Chancellor Rachel Reeves on 30 October 2024, announced significant modifications to stamp duty, including a return to previous, higher rates for residential property purchases as of 1 April 2025. Since then, there has been a marked increase in property transactions nationally as well as locally here in Bristol, as homebuyers race to beat the stamp duty rise and save themselves thousands of pounds.

Understanding stamp duty
Stamp Duty Land Tax (to give it its official name) is a tax levied on property purchases in England and Northern Ireland (Scotland and Wales have their own versions of the tax). The amount payable varies based on the property’s price and the buyer’s status, such as if they are a first-time buyer or additional property owner. Typically, stamp duty is due to be paid by the buyer upon completion of the property purchase.​

Current and upcoming stamp duty rates
As of now (March 2025), the stamp duty thresholds are as follows:​

• First-time buyers: No stamp duty on properties up to £425,000.​
• All other buyers: No stamp duty on properties up to £250,000.​

Additional amounts on top of the standard rate of stamp duty are payable for buyers who already own another property/properties (usually 5%) or if they are not a UK resident (usually 2%).

However, starting from 1 April 2025, these thresholds will revert to their previous levels:​

• First-time buyers: No stamp duty on properties up to £300,000.​
• All other buyers: No stamp duty on properties up to £125,000.​

This change means that first-time buyers purchasing properties between £300,000 and £425,000 will now face stamp duty charges, whereas they were previously exempt.​

Impact on Bristol’s homebuyers
Bristol’s property market has been notably active in anticipation of these changes. According to property portal Zoopla, homebuyers are now paying 96.8% of the asking price, the highest rate in the last 18 months. This uptick is largely attributed to buyers rushing to complete transactions before the stamp duty relief ends on 31 March 2025.​

The average property price in Bristol currently stands at £388,353, with terraced properties averaging £404,736, flats at £278,433, and semi-detached homes at £433,364, according to Rightmove. Given these figures, which are higher than the national average, many first-time buyers in Bristol are currently benefiting from the higher stamp duty exemption. Indeed, the average price paid by first-time buyers in Bristol in September 2024 was £322,000.

First-time buyers: A closer look
The impending changes have significant implications for first-time buyers. For instance, a first-time buyer purchasing a property at Bristol’s average price of £388,353 would currently be exempt from stamp duty. After April 1 2025, the same buyer would face a stamp duty bill of approximately £4,417, which is a lot of extra money to find given the already high costs of moving house and a hefty deposit to secure the best mortgage rate.

Market reactions and predictions
The announcement of the stamp duty changes has led to a flurry of activity in the housing market. Agreed property sales in the UK surged by almost 30% at the end of 2024 according to the Financial Times, as buyers sought to avoid the upcoming stamp duty increase. This trend has been evident in Bristol too, with buyers keen to lock in purchases before the April deadline.​

Experts anticipate that this rush to beat the deadline may lead to a temporary spike in property prices, followed by a potential slowdown and cooling of the market once the new stamp duty rates are in effect post-April 2025.

Advice for prospective buyers
For those considering entering Bristol’s housing market, it’s important to be aware of the upcoming changes and plan accordingly. Even if you are ​already in the process of purchasing a property and hope to benefit from the current stamp duty rates, the estate agent Yopa advises that you should still factor in the additional costs associated with the revised stamp duty rates when budgeting for your property purchase to avoid any nasty surprises in the event that you are hit with an unavailable delay.

However, if you are facing a significant stamp duty bill, there are some options that you could discuss with your vendor to expedite the sale. You could request that your vendor moves into rented accommodation if you are willing to contribute to this additional cost, or consider the option of a rent-back arrangement, whereby the vendor rents the property from the buyer for a short period after the sale while they make arrangements for their next property. Make sure you discuss these options thoroughly with your conveyancer and have a formal agreement in place though to avoid any unnecessary complications.

Whether you’re racing against the clock to beat the stamp duty rise or taking your time to find your dream home, navigating the Bristol property market can be tricky. But with the right planning and a little help from the experts, you’ll soon be on your way to finding the perfect home. Happy house hunting!

Photo by Maria Ziegler on Unsplash