The thresholds at which stamp duty starts to be payable have not risen permanently since they were first introduced in 2017. Since the end of the tax break in April 2025, first-time buyers have faced a staggering increase in stamp duty costs, paying a total of £408 million, up from just £101 million the previous year.
As of April 2025, the threshold for first-time buyers was lowered from £425,000 to £300,000, significantly impacting affordability. Currently, only 41% of homes in England are priced under this threshold, a sharp decline from 62% before the tax-free allowance was cut.
More than half of the stamp duty paid by first-time buyers originates from London, where property prices have soared. Buyers in the southeast contribute 23% of the total stamp duty, while those in the northeast account for a mere 0.3%.
Nathan Emerson, a representative from the housing sector, stated, “Stamp duty continues to act as a barrier to entry and wider market movement and should be reviewed.” This sentiment echoes the growing frustration among potential homeowners struggling to navigate the current market.
Colleen Babcock, a housing analyst, added, “Far more homes in London and the southeast now sit above the zero-rate limit. This reduces choice and increases the savings needed before buyers can even consider moving.” The implications of these changes are profound, as many first-time buyers find themselves priced out of the market.
During the previous lower-rate period, stamp duty was not payable on the first £250,000 of a property for most homeowners in England, providing significant relief. However, the current landscape presents a stark contrast, with the relief removed for those purchasing starter homes over £500,000.
As the housing market continues to evolve, observers are closely monitoring the situation. The Treasury has yet to announce any plans to address the growing concerns surrounding stamp duty and its impact on first-time buyers.
With the financial burden now heavier than ever, it remains to be seen how the government will respond to calls for reform. The urgency for change is palpable as first-time buyers grapple with the realities of a challenging housing market.