Nearly a third of first-time buyers in England are now paying stamp duty after Chancellor Rachel Reeves allowed the temporary threshold cut to expire. Estate agent Connells reports that 30% of first-time buyers are purchasing homes worth more than £300,000, triggering the tax.
Stamp Duty Threshold Changes
The previous government raised the stamp duty threshold for first-time buyers from £300,000 to £425,000 in September 2022. However, Reeves chose not to extend this temporary cut beyond April 1, 2025. In the first quarter of 2025, only 10% of first-time buyers bought properties over £425,000. A decade ago, just 14.8% of first-time buyers paid stamp duty.
Industry Reaction
Aneisha Beveridge, Research Director at Connells Group, said: “Stamp duty is becoming a bigger part of the upfront cost of buying, particularly as more people purchase their first home later in life and opt for larger, more expensive properties that can meet their needs for longer. At a time when affordability is already stretched, stamp duty costs create yet another hurdle for households trying to make the numbers stack up.”
A Treasury spokesperson countered: “First-time buyers pay no stamp duty on homes worth up to £300,000 and can claim relief on purchases up to £500,000. We’re cutting weeks off the process of buying whilst saving first-time buyers £710 on average.”
Calls for Reform
Henry Jordan, group director of mortgages at Nationwide Building Society, said: “Any review should look across all property taxes, with the aim of creating a system that enables people to move home easily, is more progressive, encourages the more effective use of the housing stock and takes into account people’s ability to pay.”
Committee chairwoman Florence Eshalomi added: “Rates of homeownership in England have declined over the last 20 years. For many people, and especially for those unable to draw upon the bank of mum and dad, the prospect of owning a home is little more than a pipe dream. No silver bullet exists but the Government can apply a range of supply and demand-side measures to help people get on the property ladder. Progress on delivering the 1.5 million new homes in this Parliament is vital. Councils should also be empowered to play a greater role in housebuilding and given additional powers to bring empty and under-occupied homes back into residential use. Reform of stamp duty is necessary but, especially given the public finance implications, this cannot be done in isolation or without a credible alternative in place. We urge the Ministry of Housing, Communities and Local Government and HM Treasury to consult on alternatives to stamp duty that can deliver long-term benefit and not a short-term fix which only distorts the housing market and exacerbates the affordability problem.”
