Policy changes including a lowered threshold and removal of relief for expensive starter homes have driven this sharp increase. The threshold at which stamp duty starts to be payable for first-time buyers was lowered from £425,000 to £300,000 in April 2025, and stamp duty relief was removed for those purchasing a starter home for more than £500,000. Before the cut to the tax-free allowance, 62% of homes for sale in England were priced under the first-time buyer threshold and free from stamp duty.
For a first-time buyer purchasing a £400,000 property, £5,000 now needs to be paid to the Treasury in stamp duty. The Treasury has raked in more than half of the stamp duty paid by first-time buyers from just one region, according to property portal Rightmove. Stamp duty is blocking the housing market, according to experts, with older homeowners stuck in larger houses with empty bedrooms because they cannot afford to pay thousands of pounds in stamp duty to downsize, and homeowners wanting to take a second step on the property ladder stuck in homes too small for their growing families because they cannot afford to pay more money in tax.
Nathan Emerson, chief executive of estate agent membership body Propertymark, said in a press release that stamp duty continues to act as a barrier to entry and wider market movement and should be reviewed. It is unclear how many first-time buyers have been affected by the threshold change since April 2025, what the total stamp duty revenue from all buyers is, or what specific measures, if any, are being considered by authorities to address the housing market issues caused by stamp duty.