What is a Lasting Power of Attorney?

A Lasting Power of Attorney is a legal document allowing someone you trust (your attorney) to make decisions for you. In property and financial matters, this includes signing contracts, completing sales, or buying a home. An LPA must be registered with the Office of the Public Guardian before it can be used. Once registered, it remains valid until revoked or until the donor passes away.

Can You Buy or Sell a Property Using an LPA?

Yes, this is a common scenario. For example, you may need to sell a parent’s home if they have moved into care, or you might be living abroad and want someone in the UK to handle the purchase of your new house. The key is that the LPA must be properly registered and give the attorney clear authority to deal with property and land.

How to Prove an LPA is Valid – Getting an Access Code

The Office of the Public Guardian (OPG) offers an online service that makes it quicker and easier to prove an LPA is valid. The donor or attorney can request a secure access code at www.gov.uk/view-lpa. This code can then be shared with organisations such as banks, solicitors, or care providers, who can view a digital summary of the registered LPA.

While the access code is a useful tool for many organisations, HM Land Registry still requires a certified copy of the LPA to be lodged with applications. This is because the Registry must hold documentary evidence on file and cannot rely solely on the online summary.

For attorneys, it is still sensible to request an access code in advance, as it can speed up checks with other organisations involved in the transaction. However, when registering a property transfer or mortgage, a certified copy of the LPA must still be provided to Land Registry.

What Does HM Land Registry Need?

When an attorney signs a transfer deed, mortgage, or other legal document, the Land Registry will usually ask to see the registered LPA (or a certified copy). If the LPA is more than a year old, they may also want confirmation that it has not been revoked. If anything is missing or unclear, the Land Registry may raise queries, potentially delaying the transaction.

What About Jointly Owned Property?

If the property is jointly owned, the rules can be more complex. A sole attorney cannot always give a valid receipt for the sale proceeds, so in some cases, more than one attorney or a trustee may need to be involved. Getting this right is crucial to avoid problems later on.

What If the Donor Has Lost Capacity?

One of the main benefits of an LPA is that it can still be used if the donor loses mental capacity. Provided the LPA is registered and valid, the attorney can complete the transaction. Buyers and lenders are also protected if they rely in good faith on a registered LPA, meaning the purchase remains secure even if issues with the document come to light later.

How We Can Help

Using an LPA in property transactions requires careful handling, but with the right legal advice, the process can run smoothly. Our Residential Property team regularly advises attorneys and families on sales and purchases involving a Power of Attorney. Whether you are selling a parent’s house under an LPA or buying a home while living abroad, we can guide you every step of the way.

As of October 2013, a buyer of a property takes free from CR, where it is not protected by an entry at the Land Registry. However, if the land has not changed hands since that date, and the purchase is the first since then, a CR notice could still be entered before the registration is complete, creating liable. As a result, it is still common practice to carry out a CR search and obtain an indemnity policy when the search flags that there is a potential risk.

The Law Commission aims to ensure that CR does not bind buyers, unless they are registered and visible, reducing the need for CR searches or insurance. 

The Law Commission’s proposals would mean that the title register could be relied upon as an accurate picture of the position at any one time. The Law Commission published the new consultation on 15 July 2025, with the consultation closing on 15 November 2025. With the Law Commission aiming to publish its final report in 2026.

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Caroline using the details below.

Sale of new flats on commonhold

The Government’s initial focus is a ban on the sale of new flats using the traditional leasehold structure. They are instead proposing that new flats are sold on a commonhold structure.  The Government will then introduce the Draft Leasehold and Commonhold Bill to Parliament during the second part of 2025.

The Government plans to adopt the Law Commission’s recommendation to enable developers to create sections within developments to enable those with different interests to vote on the issues that involve them but not on those that do not. For example, in a mixed-use estate, a floor of retail units that does not use the same facilities as the flats above could be a separate section from the flats. The Bill will contain rules about when sections can be created, combined or dissolved, but the expectation is that this will form part of the planning and construction phase. There will also be flexibility to allow the contributions from different sections to vary depending on the particular heads of costs.

Conversion of existing leasehold flats to commonhold

The Government also want to encourage the conversion of existing leasehold flats to the commonhold structure and to make commonhold the predominant form of home ownership in England and Wales.  Accordingly, the White Paper extends to their plans to amend existing commonhold procedure, which will also form part of the Draft Leasehold and Commonhold Bill.

It has been possible for residential units to be let on a commonhold basis since 2004, but uptake has been extremely low. Currently, conversion to commonhold requires the consent of the freeholder, all leaseholders and all those lending institutions with a charge over the freehold or any of the leasehold properties to create a commohold structure. The Government wants to implement the Law Commission’s recommendation that at least 50% consent is required for conversion in the future. This doesn’t completely remove all obstacles since the consent of the freeholder will still be required.  One option is therefore for a group of leaseholders to acquire the freehold first by way of collective enfranchisement and then convert to commonhold. 

The Government is keen to promote commonhold and increase awareness and understanding of how the proposed structure currently operates and could be improved via amendments to the existing legislation. Landlords, developers and those involved with residential and mixed-use properties will want to familiarise themselves with the commonhold process and education is key to the Government’s plans.

The Law Commission proposed that financial incentives may be needed for developers to offer new flats on commonhold. No such financial incentives are proposed by the Government, who intend to make it a mandatory requirement for new flats to be created in commonhold structure.  The Government’s message is that developers should start considering the implications of a move to commonhold for new flats now, together with the consultation due later in the year.

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Shen using the details below. 

The key changes are as follows:

Abolish fixed term tenancies

The Bill will abolish fixed term Assured Shorthold Tenancies (“ASTs”) and so called “no-fault” evictions. Landlords will be prevented from serving Section 21 Notices giving at least 2 months’ notice to a tenant to vacate the premises. Instead, all tenants will become assured periodic tenants occupying the property on a month-by-month basis. A tenant will be able to give 2 months’ notice to a landlord if they want to leave the premises. Landlords, however, will need to prove a statutory ground in order to obtain possession. The Government has sought to strengthen those grounds of possession. The most commonly relied upon mandatory ground for possession is a specified amount of rent arrears, which, under the Bill will require a higher threshold of arrears to be established than under the current law. The new proposed ground 8 will require there to be at least 3 months’ rent arears both at the date of service of the Section 8 Notice and the date of the hearing. Under the current law, there must be at least 2 months’ rent arrears to rely on ground 8. This means that clients will need to factor in higher arrears before seeking possession.

Increasing rent

As the new style assured periodic tenancies will have no “end date”, landlords will need to rely on the statutory process for increasing rent. This requires landlords to serve a statutory notice of increase of rent giving at least 2 months’ notice of the increase. Tenants will be able to challenge rent increases in the First-Tier Tribunal (Property) Chamber (“FTT”). Once the Tribunal has determined the open market rent for the property, this will be payable from the later date of determination rather than the date of the notice of increase. Rental increases will be restricted to one per year. A notice of increase of rent can only be served after one year has elapsed since the date of determination by the Tribunal, or date when the last rent increase took effect. In addition, there is a general right to challenge the rent in the first 6 months of the tenancy. The new rent will be assessed on the basis of the open market rent for the property. The Government have confirmed during the passage of the Bill that it is opposed to the implementation of any rent controls under the legislation.

Requests to keep pets

There is a term implied into all assured tenancies, that a tenant has the right to request consent to keep a pet at the property and the landlord cannot unreasonably refuse consent. A landlord must respond to a request within 28 days and where consent is granted, the landlord can require the tenant to take out additional insurance as a result of having a pet in the property or reimburse the costs incurred by the landlord of doing so. Obtaining pet insurance will be permitted under the Tenant Fees Act 2019, by an amendment under the Bill. There may be wider restrictions in leasehold properties, under the head lease or new build developers of leasehold properties may limit pets to particular floors or buildings.

Property database

Underpinning the Bill is a new property database which will require landlords to have an active listing. Much of the detail about how the database will operate and what information will be required to achieve an active listing will be contained in secondary legislation, which is not currently available. Additional administrative costs should be factored into a clients’ business model in registering and updating their listings on the property database.

County Court capacity

There are no provisions in the Bill to deal with the potential increase in possession claims in the County Court or challenges to rent in the FTT. Landlords can currently use an accelerated possession procedure where a Judge will usually make a possession order without a Court hearing. As landlords will be required to prove a ground for possession, the majority of possession claims, once the Bill becomes law, will require at least one Court hearing. The Government have provided assurances that there is sufficient capacity in the court system to deal and the possession process will ultimately be digitised to ensure that this does not become longer than the current system.

Restrictions on rent in advance

The Government has restricted the ability for a landlord to request rent to be paid in advance. This is currently a useful option where a tenant does not meet affordability criteria or is in full time education. It provides a low-risk option for landlords to proceed with tenants who may not otherwise be in a position to enter into a tenancy. As a result, there is likely to be an increase in the use of guarantors to guarantee the obligations of a tenant under an assured periodic tenancy. However, guarantors liability is effectively “open ended” which means they could be on the hook for an unspecified period of time.

Transitional provisions

The Government will implement the Bill on a commencement date (to be announced). As from that date all existing ASTs will be converted to assured periodic tenancies. Where a Section 21 Notice has been served and possession proceedings sent to the Court immediately before the commencement date, the Section 21 Notice will remain valid until those possession proceedings are concluded. If a Section 21 Notice has been served before the commencement date but the landlord has not yet sent possession proceedings to the Court (whether or not because the Section 21 Notice has not yet expired), the landlord will not be able to start possession proceedings until either 6 months after the service of the Section 21 Notice or 3 months beginning with the commencement date, if the 3 month period ends before the 6 month period. So, the longstop date for possession proceedings would be 3 months from the commencement date. The Bill contains identical provisions for Section 8 Notices relying on a ground of possession served before the commencement date except that technically speaking a Section 8 Notice remains valid for 12 months from the date of service (not 6 months as for Section 21 Notices).

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Caroline using the details below.

This brings into force Section 27 of the Leasehold and Freehold Reform Act 2024 (“LAFRA 2024”). This means that it is no longer necessary for:

• the tenant of a leasehold house looking to purchase the freehold or extend their lease under the Leasehold Reform Act 1967 (“LRA 1967”) to have owned their house for the last two years; or
• the tenant of a leasehold flat seeking to extend their lease under the Leasehold Reform, Housing and Urban Development Act 1993 (“LRHUDA 1993”) to have owned their flat for two years before making a claim.

Section 27 also abolishes some ancillary provisions regarding the service of notices by personal representatives where the tenant has died.  The previous situation was that a personal representative could serve a notice of claim in the deceased tenant’s name within the first two years of the tenant’s death and then in their own name after two years.  Under LAFRA 2024, personal representatives remain able to make claims in the deceased tenant’s name, provided the tenant is registered at the Land Registry as the owner of the property.

Some minor amendments are also made to the prescribed form notices of claim to acquire the freehold or an extended lease of a house under the LRA 1967.

The Regulations only bring into force Section 27 of LAFRA 2024. So, whilst the qualifying criteria is removed, all other mechanics of lease extensions and freehold purchases of houses and flats and acquisition of the right to manage remain the same.

Other provisions of LAFRA 2024 concerning valuation, increasing the qualifying threshold for right to manage and enfranchisement to 50% non-residential parts, the ban on the creation of new leasehold houses and increasing regulation of service charges and estate management charges have not been brought into force and there is no fixed date set by the Government to implement the remainder of LAFRA 2024. This may depend on the outcome of judicial review proceedings being brought against the Government by various landlords in respect of some of the provisions of LAFRA 2024.

These Regulations are the start of a series of changes intended to be brought into force by the Government which will radically alter the leasehold landscape.

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Caroline using the details below.

These include the Proceeds of Crime Act 2002, the Criminal Finances Act 2017, the Terrorism Act 2000. The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (“5th MLD”) and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR 2017”). The primary money laundering offences apply to everyone, and you commit an offence if you know or suspect that the property is criminal property.

Real estate transactions are seen by the UK Government and crime agencies as posing a particularly significant money laundering threat. As such the MLR 2017 require estate agents to understand and verify exactly who their customers are and have evidence that they have completed KYC checks. Should an estate agent become suspicious of a prospective customer or existing customer’s activities engaging in money laundering or terrorist financing activity, it must report this to the National Crime Agency. You need to take your anti-money laundering responsibilities very seriously, as if you do not complete KYC checks you would undermine your corporate responsibilities and also place yourselves at risk of prosecution.

Estate agents in the UK are required to comply with, amongst other things, legal and regulatory obligations including those defined under the MLR 2017 and obligations imposed by the Royal Institute of Chartered Surveyors (“RICS”). These place various key requirements upon estate agents, with one being to undertake KYC checks to verify the identities of their customers. For corporate customers these checks will need to be extended to enable you to identify the Ultimate Beneficial Owner and/or those who have ultimate executive control.

The client will need to provide you with documentation confirming identity and primary current residential address. Where they wish to sell their property Land Registry checks should be made to verify the client is the legal owner of that interest and has the right to sell. Where a client wishes to buy a property from one of your clients, or where the client wants advice on a particular purchase, you will also need information clarifying the origin of the funds being used to complete the transaction and a summary of your source of wealth.

You cannot place reliance on kyc carried out by external professionals.  You are ultimately responsible by law for ensuring that the KYC checks have been undertaken properly and comprehensively, you should undertake your own KYC checks.

The information must be used for the sole purpose of completing your KYC checks in order to meet legal obligations.  It must be held confidentially and should not be shared with any third parties unless required to, in order to comply with a regulator or law enforcement authorities.

Estate agents are regulated by HM Revenue & Customs (“HMRC”) to meet requirements of MLR 2017.

If a client fails to provide the necessary information, then you should not act on a client’s behalf.

You are legally required to periodically re-confirm the KYC information you hold about your clients if you remain in an on-going business relationship with them. The period of time that elapses between subsequent KYC approvals is dependent on a number of perceived risk criteria.  We obtain updated ID from our clients every two years.

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Caroline using the details below.

What is Commonhold?

Commonhold is a different way of owning flats that was introduced in 2004. Instead of buying a flat on a lease that eventually runs out, you own your flat outright, forever! You also automatically become part of a group (called a commonhold association) that looks after shared parts of the building, like the hallways, roof, or garden.

In theory, it gives flat owners more control and avoids some of the common problems with leasehold – like paying expensive ground rent or dealing with difficult freeholders. But despite the idea being around for 20 years, fewer than 20 buildings have actually switched to this system.

Why Haven’t More People Used It?

There are a few reasons:

• It’s complicated, people often find the rules and legal aspects hard to understand.
• Developers and freeholders don’t benefit under commonhold, they can’t make money from things like ground rent or service charges, so they don’t push for it.
• Lenders are cautious, banks aren’t used to lending on commonhold properties, so getting a mortgage could be trickier.

What’s Changing?

The government is now looking to make commonhold the standard way to own a flat, instead of leasehold. This comes after a big report from the Law Commission in 2020, which said the current leasehold system is outdated and often unfair.

A new law, the Leasehold and Commonhold Reform Bill, is expected in late 2025. Ahead of that, a White Paper (a kind of policy plan) has set out some big ideas:

Key Proposals

• Commonhold as the default: In future, most new flats would be sold as commonhold, not leasehold.
• Ban on new leasehold flats: Developers wouldn’t be allowed to build new flats under leasehold, except in special cases.
• More say for flat owners: People living in the building would have more control over matters like maintenance and budgeting.
• Easier to switch: It would become simpler for existing leasehold blocks to convert to commonhold.

What Could Get in the Way?

There are still a few bumps in the road:

• Banks might worry about lending for commonhold homes, since it’s unfamiliar territory.
• Developers might resist if they see it as less profitable.
• Legal details need fixing, especially when it comes to buildings that mix homes with shops or offices.

Why Does This Matter?

For a lot of flat owners leasehold has long been a source of stress and frustration. Commonhold could offer a fairer and more transparent alternative, where you truly own your home and have a say in how your building is run.

That said, the change won’t happen overnight. It will take time, but it could be the fresh start many homeowners have been waiting for.

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Shen using the details below. 

As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Residential Real Estate department, Caroline Vernon.

As of 31 January 2025, the Leasehold and Freehold Reform Act 2024 (LFRA 2024) introduces a significant change in leasehold law, offering considerable benefits to tenants seeking to extend their leases or purchase the freehold of their properties. One of the most impactful changes is the removal of the two-year ownership requirement, which has long been a barrier for leaseholders wishing to initiate claims for enfranchisement or lease extensions.

What Was the Two-Year Ownership Requirement?

Under previous legislation, tenants were required to have owned their leasehold property for at least two years before they could make a claim for:

• Enfranchisement (purchasing the freehold of the property).
• Lease extensions (extending the term of the lease).

This requirement often created unnecessary delays for tenants who had recently acquired their leasehold property but wanted to secure their long-term housing through enfranchisement or a lease extension. The time limit also meant tenants risked missing out on opportunities or face higher costs, as property values or lease extension premiums could increase during that time.

What Does the Removal of the Two-Year Ownership Requirement Mean?

From 31 January 2025, tenants will no longer need to wait for two years before they can make a claim for enfranchisement or a lease extension. This change simplifies the process and makes it quicker for leaseholders to secure long-term property rights.

For tenants who have recently acquired their properties, this is a significant benefit. They can now act immediately to secure their investments, without the delay and potential price increases tied to the previous two-year waiting period. By being able to act sooner, leaseholders could also potentially avoid higher enfranchisement premiums or increased lease extension costs that might have risen during the wait.

If you are a landlord or managing agent, this change will also impact how tenant claims are handled. Leaseholders can now initiate claims earlier than before, which may require updates to your processes.

The LFRA 2024 also introduces important changes for the personal representatives of deceased tenants. Under the previous rules, personal representatives were required to bring a lease extension claim on behalf of the deceased tenant within two years of the grant of probate. This two-year time limit for making claims has now been removed.

How Can We Help?

Our team of residential real estate, conveyancing, and tenant specialists can guide you through the agreed lease extension process under the new rules. We offer tailored support to ensure your claim is handled correctly and efficiently. Whether you are a tenant looking to extend your lease or purchase the freehold, or a landlord with questions about these changes, we are here to help you navigate the process with confidence.

If you have questions or concerns about how the reforms might impact you, our team of residential real estate, conveyancing and tenants specialists is available to provide advice and support tailored to your circumstances – Contact us here. 

As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Residential Real Estate department, Caroline Vernon.

The UK government is set to implement significant reforms to leasehold and freehold laws in 2025, as part of a wider effort to address long-standing concerns regarding the rights of leaseholders and freeholders alike. These reforms will offer enhanced protections for residential leaseholders, improve transparency, and modernise the commonhold system. The measures are outlined in the Leasehold and Freehold Reform Act 2024 (LFRA 2024) and the upcoming Leasehold and Commonhold Reform Bill.

What are the key changes?

1. Leasehold and Freehold Reform Act 2024 (LFRA 2024)

The LFRA 2024, set to take effect in the first half of 2025, introduces a series of important changes aimed at improving the rights of residential long leaseholders. Among the key provisions are:

• Banning Long Residential Leases of Houses (With Exceptions): The Act prohibits the granting of long residential leases (21 years or more) of houses unless certain exceptions apply. These exceptions include leases granted from a leasehold estate where the superior lease was set up before 22 December 2017 or pursuant to an agreement for lease entered into prior to 22 December 20217, as well as retirement and shared ownership leases.
• Amending Leasehold Enfranchisement and Lease Extensions: Leaseholders will no longer be required to wait two years before claiming the right to extend their lease or buy the freehold of their property. Additionally, restrictions preventing tenants from making a second claim within 12 months of a failed claim will be removed. Furthermore, tenants of houses and flats will be able to claim lease extensions without the previous 50-year limitation from the term date of their existing lease.
• Increased Rights for Leaseholders and Freeholders: The Act expands the rights of leaseholders, particularly in relation to service charges, insurance, administration fees, and the provision of sales information. Importantly, it also introduces regulation for estate management charges, offering freeholders protections akin to those enjoyed by residential leaseholders.
• Mandatory Redress Scheme for Landlords: Landlords and estate management companies will be required to register with a mandatory redress scheme, ensuring greater accountability and fairness.
• New Regulations for Rent Charges: The Act includes provisions to regulate demands for, and remedies to address, non-payment of historic rentcharges, offering further protection to tenants.

2. The Leasehold and Commonhold Reform Bill (2025)

In the second half of 2025, the government will introduce a draft Leasehold and Commonhold Reform Bill. This bill aims to modernise the commonhold system and make it the default tenure for new homes. For years, commonhold has been seen as an alternative to leasehold ownership, but it has not been widely adopted. There ae only 184 properties registered as commonhold in England and Wales. The new bill seeks to address barriers to commonhold and simplify its implementation, benefiting future generations of homeowners.

3. Right to Manage Reforms (Spring 2025)

Another notable change will be the introduction of measures to reform the cost rules and voting rights for leaseholders seeking to exercise their right to manage. Leaseholders in mixed-use buildings will find it easier to take over management responsibilities from their freeholders, as the requirement for them to pay the freeholder’s costs will be eliminated in most cases. The reforms will also include provisions to reduce costs and simplify the process of exercising the right to manage, which could significantly increase the number of leaseholders able to take control of their buildings’ management.

4. Protection Against Unscrupulous Managing Agents

The government is committed to enhancing protections for leaseholders against unscrupulous managing agents by introducing stronger regulations. This will include a mandatory professional qualification for managing agents, as well as a new basic standard for their conduct. A public consultation on these measures will take place later this year, which could lead to more stringent requirements for those responsible for managing residential properties.

5. Simplifying Service Charge Disputes and Valuation Rates

Further consultations will take place this year to streamline processes related to service charge disputes, particularly in relation to unreasonable costs. Leaseholders will also benefit from simplified methods for challenging excessive service charges and a clearer approach to setting valuation rates used in the calculation of enfranchisement premiums. New consumer protection provisions will enhance transparency and provide leaseholders with the right to challenge excessive charges at the First Tier Tribunal.

What This Means for Leaseholders and Freeholders

The leasehold reforms planned for 2025 mark a significant shift in the landscape of property ownership in the UK. Leaseholders will see increased rights and easier pathways to enfranchisement and lease extensions, which will ultimately give them more control over their properties. The measures around the right to manage and estate management regulation will help to address some of the most common frustrations of leaseholders, particularly in relation to poor property management and excessive charges.

For freeholders, the new regulations around estate management charges and the introduction of a mandatory redress scheme mean that greater oversight and accountability will be required. The shift towards commonhold could also impact freeholders in the long term, as the government aims to make this tenure the default for new homes.

As the government moves forward with consultations and the introduction of new bills, leaseholders and freeholders alike will need to stay informed to fully understand how these changes will affect them.

If you have questions or concerns about how the reforms might impact you, our team of residential real estate, conveyancing and tenants specialists is available to provide advice and support tailored to your circumstances – Contact us here. 

What’s Changing?

1. Higher SDLT for Second Homes and Buy-to-Let Properties

From 31^st October 2024, the SDLT surcharge on second homes and buy-to-let properties increased by 2%. Buyers of additional properties currently pay a 5% surcharge on top of the standard SDLT rates, making it more expensive to invest in second homes or rental properties.

2.First-Time Buyer SDLT Relief

The SDLT relief scheme for first-time buyers, which provided a reduction or complete exemption for purchases below certain thresholds, will change. Currently, first-time buyers purchasing homes up to £625,000 (or receiving relief on the first £425,000) benefit from substantial savings.

From 1^st April 2025, first-time buyers will pay no SDLT on the first £300,000 of a property priced up to £500,000. Beyond £300,000, SDLT will apply at standard rates up to the purchase price cap of £500,000. Any property purchased above £500,000 will not be eligible to benefit from the relief.

This change means that first-time buyers will now pay higher SDLT rates, increasing their upfront costs.

3. Changes to SDLT thresholds

In a significant shift, the nil-rate SDLT threshold will be reduced from £250,000 to £125,000 from 1^st April 2025. This means buyers will now start paying SDLT on purchases above £125,000 instead of the current £250,000 threshold.

This reduction will result in higher upfront costs for most buyers.

What This Means for Buyers

Residential Buyers

For those purchasing primary residences, the reduced threshold means higher costs for a broader range of transactions. Buyers should factor these increased costs into their financial plans and consider completing purchases before 1^st April 2025 if possible.

Property Investors

If you’re considering adding to your property portfolio, now may be the time to act. The increased surcharge combined with the lower threshold will significantly increase transaction costs.

First-Time Buyers

The change in SDLT rates and thresholds may delay purchases for first-time buyers who are saving for deposits. This change could slow activity in the housing market, particularly for properties at the lower end of the price spectrum.

Planning Ahead

To mitigate the impact of these changes, buyers should consider:

• Acting Before April 2025: Completing transactions before the new rules take effect could save thousands of pounds.
• Seeking Financial Advice: Consulting a mortgage adviser or financial planner can help you navigate the changes.

Conclusion

The changes to SDLT in 2025 represent a significant shift in the property market. The reduced nil-rate threshold and higher surcharges will result in increased costs for most buyers. As solicitors, we recommend planning ahead, seeking expert advice, and ensuring you’re fully informed about the financial implications of your purchase.

If you have questions about how these changes may affect your property transaction, contact us, we are here to guide you every step of the way.