New figures show impact of lower nil‑rate threshold on buyers
Homebuyers paid £899 million in Stamp Duty Land Tax (SDLT) in January, Coventry Building Society has calculated from the latest HMRC figures, a 6% increase on the £848 million collected in the same month last year.
January is usually a quieter period for completions as many transactions avoid the Christmas and New Year period, so SDLT receipts often ease back at the start of the calendar year. Despite this, buyers still contributed close to £900 million to the Exchequer last month.
Over the whole of last year, purchasers paid £15.4 billion in stamp duty, up 18% on the £13 billion recorded in 2024. The society said the main driver for the higher tax take was the reduction in the nil‑rate band from £250,000 to £125,000 in April, bringing more transactions into scope.
The £125,000 threshold was first introduced in December 2014, when the average UK property cost £176,561. By December 2025, the latest UK House Price Index shows the typical price had risen to £270,259 – an increase of more than £93,000. As a result, many properties that previously fell beneath the tax bands now incur SDLT purely because of price inflation rather than changes in property type or size.
“Stamp Duty is one of those costs that really hits home because buyers have to find the money upfront - on top of their deposit and moving costs,” said Jonathan Stinton (pictured right), head of intermediary relationships at Coventry Building Society. “While January is usually a quieter month for completions, it’s striking that buyers still handed over such a significant sum to the Treasury.
“Over the past year, we’ve seen how changes to the nil-rate threshold have pushed more ordinary home purchases into paying tax. The £125,000 starting point might have made sense back in 2014, but house prices have moved on dramatically since then. As a result many buyers are now paying Stamp Duty simply because property values have risen, not because they’re buying larger homes.
“If Stamp Duty has any chance of being considered fair and proportionate, it has to reflect today’s market. We have seen the government make sudden changes in direction on policies and this would be a welcome one. An urgent refresh of the thresholds would bring the system back in line with reality and take some of the pressure off people trying to move.”
For brokers, the figures underline the importance of factoring stamp duty into affordability conversations, particularly for borrowers close to threshold levels or looking to move up the ladder in higher‑priced regions.
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