Stamp Duty Hike Stings First-Time Buyers

The amount of stamp duty paid by first-time buyers has quadrupled since a tax holiday ended, reaching £408 million since April 2025, a significant increase from £101 million in the previous year. Property portal Rightmove analysis reveals that the Treasury has collected more than half of this revenue from just one region. The thresholds for stamp duty, which have not been permanently increased since 2017, were temporarily raised in autumn 2022 but reverted in April 2025. For first-time buyers, the tax-free threshold was lowered from £425,000 to £300,000 in April 2025, meaning a 5% tax applies to properties above this amount. This change has reduced the proportion of homes available under the threshold from 62% to 41% in England.

Experts argue that stamp duty is acting as a barrier, hindering market movement and trapping individuals in unsuitable homes. Older homeowners who wish to downsize and unlock equity are deterred by the high tax, while growing families are unable to move to larger properties. Nathan Emerson of Propertymark noted that the reduced threshold has increased upfront costs and limited suitable housing options, particularly in higher-value areas. This has created a growing regional imbalance, with London and the South East disproportionately affected, as over half of the stamp duty from first-time buyers originates from these areas.