Stamp Duty Changes: Buyers Remain Resilient

Market Resilience Despite Tax Changes

Recent stamp duty changes have drawn approximately 310,000 current property transactions into higher tax brackets across England and Wales. However, contrary to what many property experts predicted, there's currently no evidence that buyers are seeking discounts to compensate for these increased costs.

According to research by Hamptons, properties in the first quarter of 2025 sold for an impressive 99.0% of their final asking price on average. This represents a significant improvement from the same period last year, when typical homes sold at a 1.6% discount.

For homeowners in the Rugby area, this trend offers reassurance that the local property market remains robust despite fiscal policy changes. The strength of our town's housing market continues to demonstrate resilience, supported by falling mortgage rates which have been strengthening prices consistently over the past four months.

Narrowing Price Gaps

The gap between asking and selling prices has narrowed substantially. In monetary terms, the average home across England and Wales sold for just £2,000 less than the final asking price in Q1 2025, compared to £4,000 below asking in Q1 2024.

First-time buyers have experienced an even more dramatic shift. From securing a £2,000 discount in the first quarter of 2024, the median discount for new homeowners has shrunk to zero in Q1 2025. Perhaps most striking is that 29% of first-time buyers paid over the final asking price in Q1 2025, up from 27% in the same period last year.

For those looking to sell their property in Warwickshire, this data suggests that realistic pricing is being rewarded in the current market, with buyers willing to meet or exceed asking prices to secure their desired home.

First-Time Buyers Showing Confidence

Another surprising finding contradicts the assumption that first-time buyers might target cheaper properties to offset higher stamp duty costs. The research reveals that the average new homeowner spent £251,500 on their first home—3.1% more than in Q1 2024.

This trend is particularly encouraging for the local area, where first-time buyers play a vital role in maintaining a healthy property market. The willingness of new entrants to commit to property purchases despite increased costs demonstrates confidence in the long-term value of housing in our region.

Only London (-5.3%) and the North West (-0.1%) bucked this trend, with typical first-time buyers spending less than last year. The London decrease partly reflects first-time buyers facing steeper increases in stamp duty. They paid £424,780 for their first home in Q1 2025 on average—£23,950 less than last year—which more than offsets the £6,239 rise in their stamp duty bill.

Moreover, the share of first-time buyers purchasing a home in the capital for more than £425,000 (the old SDLT threshold) fell from 45% in 2024 to 40% in Q1 2025.

What This Means for Rugby Homeowners

These national trends translate to tangible impacts for homeowners in Rugby and the surrounding villages. With buyers continuing to pay close to asking prices, sellers can approach the market with confidence, knowing that appropriately priced properties continue to attract strong interest.

The resilience shown by first-time buyers is particularly encouraging for those looking to sell starter homes in Warwickshire. Despite the increased tax burden, these crucial market participants remain active and committed.

At Ellis Brooke Estate Agents, we're witnessing these trends first-hand through our daily interactions with buyers and sellers across the local area. Our team's extensive knowledge of Rugby's property landscape allows us to provide tailored advice that reflects both national trends and local market conditions.

Looking Forward

While it's still early days following the stamp duty changes, initial indicators suggest a housing market that continues to function effectively despite the fiscal adjustments. For those considering selling or buying in the Rugby area, the current market environment offers opportunities on both sides of the transaction.
If you're considering a move and would like to understand how these market conditions might affect your specific circumstances, our team at Ellis Brooke is always available to provide personalised guidance based on our 30+ years of combined experience in the local property market.