Stamp duty divide grows between buyers in the South and the North

The North and South stamp duty divide is widening, with fewer than one in ten buyers in the North paying stamp duty, according to new research.

Data from Zoopla reveals that nearly 80% of London first-time buyers pay stamp duty, compared with fewer than one in ten across the North of England.

Stamp duty is currently paid on property purchases above certain thresholds, with first-time buyers exempt up to £300,000 and standard residential purchases exempt up to £125,000. In the 2024 Autumn Budget, Chancellor Rachel Reeves increased the stamp duty surcharge on additional homes from 3% to 5%.

Stamp duty bill on top of a deposit

Richard Donnell, executive director at Zoopla, explains: “Where you’re buying determines what you pay in stamp duty if you’re a first-time buyer. In the North and Midlands, the £300,000 takes nine in ten first-time buyers out of paying anything extra to buy their home.

“In London and the South East, the cost of buying an average first time buyer homes is above £300,000 for many buyers which means the majority of first-time buyers face a stamp duty bill on top of an often sizable deposit.

“For home movers, stamp duty is a near-certain cost wherever you live – and in Southern England it runs to five figures. Six in ten property purchases are made by existing homeowners. When the cost of moving becomes a meaningful friction, some of those moves don’t happen, especially with lower levels of house price inflation in recent years across southern England.”

2.1% of first-time buyers pay stamp duty

According to the research, in the North East, just 2.1% of first-time buyers face a stamp duty bill. In Yorkshire and the Humber, the figure is 3.8%, while in the North West and West Midlands it is 6.2% and 9.3% respectively.

The South East and East of England sit at the tipping point, with 51% and 52% of first-time buyers in those regions paying stamp duty, adding to the cost of buying.

In these areas, the average price of a home where stamp duty is paid is £395,000 and £390,000 respectively, well above the national average.

In London, nearly eight in ten (79.7%) first-time buyers pay stamp duty, where the average first-time buyer price is £475,000. The average stamp duty bill is £8,750.

Four in five homeowners pay stamp duty costs

For existing homeowners buying their next property, there is no stamp duty relief available, unlike for first-time buyers.

This means more than four in five homeowners pay stamp duty in every English region bar the North East, where nearly two thirds (63.5%) face a bill.

In the North, bills are modest, averaging £2,200 in both Yorkshire and the North West, where home movers pay less than one penny in every pound of their purchase price as stamp duty.

More than 95% of South East home movers pay stamp duty at an average cost of £11,250. In London, where the median home mover asking price is £600,000, the bill reaches £20,000.