Stamp duty changes to increase buying costs for 83 per cent of homebuyers holding back price growth in 2025 – analysis from Zoopla reveals.

Key points from analysis:

• • Significantly more homebuyers will pay stamp duty in 2025, expected to hit house price growth by up to one per cent. 
  • In total, 83 per cent of homebuyers will pay more stamp duty from April 2025, up from 49 per cent today. 
  • The return of the two per cent rate will hit existing owners looking to move and buy a home in the £125,000 to £250,000 price range, where a third of buyers are currently looking to buy
  • The extra costs for first-time buyers will predominately fall on those in southern England 
  • Higher buying costs will be reflected in what homebuyers are prepared to pay in 2025, resulting in a drag on house price growth

More homebuyers will pay stamp duty in 2025, expected to hit house price growth by up to one per cent, finds new analysis from Zoopla, one of the UK’s leading property websites. 

From April 2025, stamp duty rates in England and Northern Ireland will revert to previous levels, resulting in a two per cent tax on sales between £125,000 and £250,000 for homebuyers and a reduced rate of relief from SDLT for first-time buyers (FTBs). In total, 83 per cent of homebuyers will pay more stamp duty from April 2025, up from 49 per cent paying today. 

The return of the two per cent rate will hit existing owners looking to move and buy a home in the £125,000 to £250,000 price range, where a third of buyers are currently searching. Homebuyers in this price band will see SDLT up to £2,500 or one per cent of the property value.

The impact will be more keenly felt by buyers in the Midlands and Northern England, where up to 67 per cent of sales sit in this price range. In addition to the third of sales brought back into SDLT, the 49 per cent of sales above the £250,000 threshold will pay the extra £2,500 per sale. The ‘average home’ priced at £300,000 will see the amount of SDLT double to £5,000 from April 2025. 

The level of first-time buyer relief from SDLT will also reduce, from £425,000 to £300,000, with an additional 20 per cent of first-time buyers liable to pay. This means 40 per cent of FTBs will pay full or partial SDLT.

The extra costs for buyers will predominately fall on those in southern England due to the 30 and 34 per cent of FTBs in the Eastern, South-East and London regions looking to buy homes in the £300,000 to £425,000 price band.

Table 1: Percentage of sales hit by high stamp duty costs from April 2025

In simple terms, buyers faced with higher purchase costs will want them reflected in the purchase price which will act as a drag on house prices in 2025. The impact of the two per cent rate will be felt more keenly by average homebuyers in the Midlands and northern regions of England, where sales of homes between £125k and £250k are more common. 

Table 2: Homeowner demand by SDLT band

Richard Donnell, Executive Director at Zoopla, comments: 

“The growing complexity of SDLT makes assessing its impact on market activity and pricing increasingly difficult.

“Whilst an additional stamp duty payment of £2,500 might be more manageable for those purchasing £1m homes, it’s a much bigger cost for those buying cheaper homes. 

“Faced with this higher cost, homebuyers will want it reflected in the price they pay for their home and will seek to make offers, keeping prices rises in check over 2025 and into 2026.

“These changes are likely to take 0.5 to 1 per cent off house price growth in 2025 hitting buyers in higher value markets and re-enforcing a north-south divide for price growth.”

Kindly shared by Zoopla