What are the new Stamp Duty charges?

On  April 1, 2025, the Government changed Stamp Duty rates.  One of the most common questions I am asked is how this will impact individual buyers and the market in general. Especially as the threshold has also changed for first time buyers.

For example:

First time buyers Regular buyers

Purchase price: £350,000 £350,000

Stamp duty before 1st April: £0 £5,000

Stamp duty after 1st April: £2,500 £7,500

Let’s take a look in more detail.

FIRST TIME BUYERS

Previously  first-time buyers in England and Northern Ireland paid no stamp duty on properties valued up to £425,000, with a reduced rate applying up to £625,000.

However, the new changes have lowered this threshold  to £300,000, with standard rates applying beyond this point. This  means that first-time buyers purchasing properties above £300,000 will face increased upfront costs.

For other buyers, the temporary Stamp Duty cuts introduced in 2022 are set to expire, leading to a return to the previous system. The standard nil-rate threshold will revert from £250,000 to £125,000, meaning buyers across the board will see higher tax liabilities when purchasing homes.

My colleagues across eXp and a number of mortgage brokers and advisors that I know have reported increased activity with properties below the £425,000 threshold at the end of 2024 and in January and February 2025, with some buyers stretching their budgets to secure a property before the tax increases came into effect The result has been greater competition, reduced availability of desirable properties, and in some cases, an increase in gazumping as buyers outbid each other. 

Although  it is too early to say for certain, I am expecting that the market may experience a shift. Many first-time buyers, now facing higher costs, might delay purchases, opting instead to save for a larger deposit or seek alternative financing options. This could lead to reduced demand in certain price brackets, particularly for properties between £300,000 and £400,000, where first-time buyers previously benefited most from Stamp Duty relief. .

What might happen to Property Prices in 2025?

With the rush to buy before April 1 inflating demand, some property price growth has been seen in early 2025. However, once the tax changes take effect, a potential cooling-off period is possible, which may create more favourable terms for buyers and those looking to negotiate on their next property purchase.

During the last quarter of 2024, with a new Labour Government, there was renewed optimism in the country, but following the Autumn budget and the recent Spring statement, the on-going uncertainty with Tariffs and the general economy,  expectations have changed and it is largely predicted that  property prices will stabilise, with slightly modest growth throughout the year rather than significant increases

 According to forecasts from the Office for Budget Responsibility, the average UK house price, which stood at £269,000 in early 2025, is projected to rise gradually, reaching approximately £295,000 by 2029. While this indicates continued growth, it suggests a market that is adjusting to the new tax landscape and broader economic conditions.

NEW STAMP DUTY RATES.

Conclusion

The 2025 Stamp Duty changes are set to potentially reshape the UK property market. The initial rush to buy before the new rates take effect has temporarily pushed up demand and prices. While house prices are still expected to rise, the pace of growth is likely to be more measured than in previous years, creating in itself more affordability and investor opportunity.

Nonetheless, the UK property market remains a dynamic space full of opportunities and as ever the rental market remains robust as demand for those unable to buy remains high.