Experts warn of reduced buyer activity and knock-on effects for housing market
Homebuyers in the UK have paid significantly more in Stamp Duty Land Tax (SDLT) this year following changes to tax thresholds introduced in the April Budget, according to new analysis of HM Revenue & Customs (HMRC) data.
Between January and May 2025, buyers paid £5.5 billion in SDLT — a 25% rise from the £4.4 billion recorded over the same period last year, Coventry Building Society reported. Annual figures released by HMRC show a 20% year-on-year increase, with £14.1 billion collected over the past 12 months, up from £11.8 billion.
The increase follows the reduction of the nil-rate threshold from £250,000 to £125,000, which came into effect on April 1. As a result, more homebuyers are now liable for the tax, pushing up the cost of moving.
In May alone, SDLT receipts fell to £918 million from £1.3 billion in April, likely reflecting a slowdown in transactions immediately after the threshold change.
Coventry Building Society said the tax bill on an average-priced home has now risen to £3,274 — more than four times higher than the £774 it would have been under the previous threshold.
“Homebuyers are handing over eye-watering sums in stamp duty,” said Jonathan Stinton, head of intermediary relationships at Coventry Building Society. “The bill for an average priced home has more than quadrupled, and that’s on top of everything else buyers are trying to cover.
“When moving comes with thousands in tax, it can put people off making that next step – whether it’s upsizing, downsizing, or just finding a home that better suits their life. That kind of strain doesn’t just affect individual buyers, it can slow the market down for everyone.”
Accountancy firm Lubbock Fine said the reduced threshold may limit mobility among working households by discouraging people from relocating for better employment opportunities.
“The Chancellor slashed the stamp duty allowance in the latest Budget – this has dragged many more homebuyers in the stamp duty net,” said Andrew Noton, partner at Lubbock Fine. “Very few properties – especially in London and the South East – are worth less than the new allowance. Many more homebuyers will be paying a hefty stamp duty sum on top of the value of their new property.
“Adding such a large extra cost to a house purchase will deter people from moving. This is a tax on labour mobility which makes it harder to relocate closer to new career opportunities.”
Noton also highlighted the broader economic implications, noting that housing activity drives demand for building materials, tradespeople and professional services.
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