The Government has 'turned its back' on first-time buyers according to property experts, with stamp duty costs set to skyrocket from 1 April next year.

In the run up to the election, Labour had said it wanted to get more properties into the hands of first-time buyers.

It said it planned to introduce a new and improved Help to Buy scheme, as well as a permanent mortgage guarantee scheme, designed to encourage banks to lend to people with only a small deposit - but so far these have not materialised. 

Rachel Reeves also steered clear of any stamp duty sweeteners in the Budget, meaning first-time buyers look set to pay thousands more when purchasing a home.

From 1 April, the thresholds at which people start paying the property purchase tax will revert to the levels set before temporary changes were made in 2022. While this applies to all home buyers, those getting on the ladder for the first time are disproportionately hit. 

The price at which stamp duty starts to be charged will revert back to £300,000 for first-time buyers, from its current level of £425,000. 

For first-time buyers, this could mean that instead of paying no stamp duty on a purchase worth £425,000, they will soon pay £6,205.

The costs get even higher for any first-time buyers purchasing a property worth between £425,000 and £625,000.

A first-time buyer buying a home worth £625,000 currently pays £10,000 in stamp duty. But from 1 April, that will rise to £21,250 - an increase of £11,250.  

April deadline 'will push up house prices'

Marc von Grundherr, director of the estate agent Benham and Reeves is critical of Labour's support for first-time buyers to-date.

'Despite claims that it would prioritise the plight of first-time buyers, it's fair to say that this Labour Government has done anything but since it came to power,' says von Grundherr.

He adds that the impending deadline to buy a home before stamp duty increased again had 'spurred an immediate flurry of activity' which would 'artifically inflate' the market and push up prices in the short term. 

This, he says, would make it even more difficult for first-time buyers to get on the ladder.  

'There's been no other initiates announced to help first-time buyers overcome the high cost of homeownership and so it's fair to say that the government seems to have turned its back on them,' von Grundherr adds. 

Rob Houghton, founder and managing director at Reallymoving adds: 'This presents a significant additional upfront cost at a time when first-time buyers are already grappling with high house prices and mortgage rates, as well as extortionate rents which make it harder than ever to save a deposit. '

But while experienced home buyers might be well aware of the stamp duty changes, property experts also say that many first-time buyers are not - which could lead to a nasty financial shock.  

Chris Barry, director at conveyancing firm Thomas Legal, says: 'Most clients enquiring for conveyancing for their first purchase are unaware of the increased tax payable from April and we have to encourage them to offer on a property quickly.'

Southern and Eastern first-time buyers to be worst hit

In cash terms, the average property is now worth £291,828, according to the latest figures from the Land Registry.

This means someone purchasing the average UK property will still be safe from stamp duty as of 1 April year.

However, in more expensive parts of the country, first-time buyers will suffer. 

For example, in London the average home is selling for £525,586, according to the latest Land Registry figures.

Someone buying the average London home will see their stamp duty bill rise from £5,029 to £16,279 from 1 April.

In London, only 8 per cent of homes for sale are set to be stamp duty-free for first-time buyers from April, according to analysis by Rightmove. The figure is 24 per cent in the South East, and 32 per cent in the East of England 

Austyn Johnson, founder at Mortgages For Actors says it will make it even harder for people to buy in the higher-value areas such as London. 

'This means - clients who would normally have bought, may need to wait for another couple of years to save the extra, use help from family, or even consider moving away from their work. 

'Public transport is great, but it does end up being expensive if you are adding 50 miles a day to your commute due to living outside of The Big Smoke. 

'If property prices keep on rising, there will be very little available in London for people who fit underneath the new threshold. 

'I'm advising any client who is only just getting started, to have a chat with parents or make sure they have the extra savings in the bank, just in case they don't complete on time.

'I can see a bit of a logjam happening early next year with all the mad rush of legals trying to get in before the deadline. Hopefully, most will make it, but for the unlucky few, tough call.'

How to beat the stamp duty deadline

It currently takes an average of 5 months - or 151 days to be exact to complete a property transaction after agreeing a sale, according to Rightmove, so first-time buyers would need to beat the average in order to complete before 1 April. 

Barry of Thomas Legal says first-time buyers should hope to complete on purchases in less time than the norm as they don't need to sell in order for them to buy.

He says: 'In theory, clients should look to secure a successful bid on their first home before Christmas on a leasehold property, before February on a freehold property and if they are buying with cash and have no chain either side, they may be able to complete within the month of March.' 

Property experts suggest buyers will need to be prepared to move quickly once their offer is accepted.

Ben Thompson, deputy chief executive at broker Mortgage Advice Bureau said: 'The first step should be to have all your paperwork in order. 

'Whilst this can be boring, mistakes or delays in providing evidence can severely impact your chances of getting a mortgage offer.

'Additionally, if you have a gifted deposit, mortgage lenders will often require proof in the form of a "gifted deposit letter" from the donor, confirming they expect no repayment and have no interest in the property.

'Using a gifted deposit can make securing a mortgage easier, especially if it helps you meet the lender's deposit requirements. It could also help to lower your loan-to-value. 

'However, not all lenders accept gifted deposits in the same way, and there may be conditions on who can gift the money. Speak to a mortgage adviser.' 

Craig Fish, director at Lodestone Mortgages & Protection adds: 'For those still keen, it's all about preparation. Get your paperwork gift-wrapped and ready, and start viewing properties like they're the hottest items on the Christmas list. 

'The market slows this time of year, so it's time to pull out all the stops and make your homeownership dreams a festive reality.'

For those who want to beat the stamp duty deadline, picking a good solicitor and mortgage broker will also be vital.

Aaron Strutt, product and communications director at mortgage broker Trinity Financial says: 'Buyers will need to find a property with either no chain or a less complex one and choose a good solicitor. 

'Mortgage lenders normally take between two and three weeks to provide an offer and confirm how much they will lend and that the property is suitable. The legals and property searches can take a lot longer.'

Ross Lacey, director & independent financial adviser at Fairview Financial Management advises getting everything in place before even making an offer.

'The key to this will be getting a decision in principle worth the paper it's written on and lining up a solicitor to help with the legal side of things,' says Lacey.

'This will mean everything is in place should the right property come up and have an offer accepted.'