Santander UK has seen a 130% increase in mortgage applications in Q4 2024 compared to the year before, as buyers rush to complete purchases during the stamp duty holiday.
From 1 April, the stamp duty nil-rate threshold for first-time buyers will drop from £425,000 to £300,000, while for other buyer types it will fall from £250,000 to £125,000.
All other buyer types will pay 2% on the amount between £125,000 and £250,000 – a potential extra cost of up to £2,500.
It typically takes four months from mortgage offer to completion, the bank said.
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 1 April.”
First-time buyers are set to see the biggest increase in potential costs as a result of the changes to stamp duty. In the South East, where the average house price is £385,600, first-time buyers could save up to £4,280 in stamp duty by purchasing before 1 April.
After the change, if they are buying a property over £500,000, they will be faced with the same stamp duty costs as a next-time buyer, for example in London, where prices average £535,700, this would add a potential extra cost of £11,250.
First-time buyers are increasingly compromising on location to fulfil their dream of owning a home. Two-thirds (67%) of Brits who bought their first home in the last two years had never seen their new neighbourhood before buying, compared to just over half (51%) of those who bought more than five years ago.
According to the research, first-time buyers moving to new neighbourhoods in the last two years saved an average of £29,000 compared to buying a house in the area they lived in before.