Stamp duty (SDLT) holidays are renowned for causing distortions in the housing market. However, this one seems to have had a fairly muted impact so far.
While the number of sales being agreed dipped relative to last year during the run-up to the very end of the holiday, pricing has held up well. Most buyers have accepted the increase in SDLT, thanks partly to lower borrowing costs, which have helped offset some of the pain.
In the first quarter of the year, first-time buyers purchased a record 33% of all homes sold across Great Britain, up from 30% in Q1 2024, which in itself marked an all-time high. These buyers were unlikely to complete before the April deadline, with only 16% of first-time buyers who agreed a sale in the first quarter making the cut-off.
In absolute terms, while there were 1% more sales agreed Great Britain in Q1 2025 than in Q1 2024, first-time buyer numbers increased by 9%.
Some of the biggest falls in mortgage rates have come from loans requiring small deposits, which are often used by those purchasing their first homes. For example, a first-time buyer who purchases a £400k home with a 10% deposit will be able to borrow around £19k more than in November due to mortgage rates falling, more than offsetting the £5k stamp duty increase. And with rents still rising, first-time buyers remain committed to becoming homeowners. Since 2009, just after the financial crash, the proportion of homes sold to new homeowners has doubled. However, this also partly reflects the fact that high moving costs have deterred existing homeowners from moving as often.
The share of homes in Great Britain bought by a mover (someone both buying and selling at the same time) continued to decline, reaching 56% in Q1 2025, down from 57% in Q1 2024 and 65% a decade ago in Q1 2015. There was also a fall in the proportion of homes bought by investors, who made up 10% of all buyers in Q1 2025, the lowest level since 2008.
Perhaps surprisingly, the biggest uplift in first-time buyers has come in the £300k+ price bracket. It’s here that new homeowners will see the biggest increase in their stamp duty bill. This group made up 26% of purchases over £300k in Q1 2025, up 4% year-on-year and more than double the proportion from 10 years ago.
London has seen the second-largest increase in the share of homes bought by first-time buyers, just behind Wales. New homeowners made up half of all buyers in the capital in Q1 2025, the highest proportion since our records began in 2007. This figure has risen from 43% in Q1 2024 and has nearly doubled over the last decade.
The average person purchasing a new home in the capital will see their stamp duty bill rise by £6,240. Despite first-time buyers now paying stamp duty above £300,000, London is the only region in the country where the average first-time buyer will pay.
Meanwhile, the North East and East Midlands are the only regions where first-time buyer purchases have fallen proportionally over the last year. The share of homes bought by a new homeowner in the North East fell from 27% in Q1 2024 to 12% in Q1 2025. Due to lower property prices, it’s here that both first-time buyers and movers are least likely to face an increase in their stamp duty bill post-April, which means we would have expected to see less change.
Even though the stamp duty changes from 1 April are set to drag another 310,000 property transactions into paying tax and cause many other buyers to face bigger bills, we haven’t seen more buyers successfully negotiate bigger discounts on their purchase.
In fact, the average property in England & Wales sold for 99.0% of its final asking price in the first quarter of 2025, the second strongest asking to achieved value recorded in the first quarter of any year since our records began. In the first quarter of last year, the typical home sold at a 1.6% discount. In pound terms, the average home sold for £2,000 less than the final asking price in Q1 2025, down from £4,000 in Q1 2024. First-time buyers have gone from negotiating a £2,000 discount in Q1 2024 to a £0 median discount in Q1 2025. In fact, 29% of first-time buyers paid over the final asking price in Q1 2025, up from 27% in Q1 2024.
There are also no signs that first-time buyers are purchasing cheaper properties in a bid to offset a higher stamp duty bill. The average new homeowner spent £251,500 on their home, 3.1% more than in Q1 2024, which reflects broader price growth in the market.
London (-5.3%) and the North West (-0.1%) are the only regions where the typical new homeowner spent less than last year.
The fall in London partly reflects first-time buyers facing the steepest increases in stamp duty. They paid £424,780 for their first home in Q1 2025 on average, £23,950 less than last year, which more than offsets the £6,239 rise in their stamp duty bill. The share of first-time buyers purchasing a home in the capital for more than £425,000 (the old SDLT threshold) fell from 45% in 2024 to 40% in Q1 2025.
While the number of sales being agreed dipped relative to last year during the run-up to the very end of the holiday, pricing has held up well. Most buyers have accepted the increase in SDLT, thanks partly to lower borrowing costs, which have helped offset some of the pain.
Who's buying?
Rising stamp duty bills have not deterred first-time buyers. Despite the share of first-time buyers set to pay stamp duty nearly tripling in April, from 9% to 26%, they’ve continued house hunting this year. We estimate that the end of the stamp duty holiday will cost first-time buyers an extra £403 million in tax during 2025.In the first quarter of the year, first-time buyers purchased a record 33% of all homes sold across Great Britain, up from 30% in Q1 2024, which in itself marked an all-time high. These buyers were unlikely to complete before the April deadline, with only 16% of first-time buyers who agreed a sale in the first quarter making the cut-off.
In absolute terms, while there were 1% more sales agreed Great Britain in Q1 2025 than in Q1 2024, first-time buyer numbers increased by 9%.
Some of the biggest falls in mortgage rates have come from loans requiring small deposits, which are often used by those purchasing their first homes. For example, a first-time buyer who purchases a £400k home with a 10% deposit will be able to borrow around £19k more than in November due to mortgage rates falling, more than offsetting the £5k stamp duty increase. And with rents still rising, first-time buyers remain committed to becoming homeowners. Since 2009, just after the financial crash, the proportion of homes sold to new homeowners has doubled. However, this also partly reflects the fact that high moving costs have deterred existing homeowners from moving as often.
The share of homes in Great Britain bought by a mover (someone both buying and selling at the same time) continued to decline, reaching 56% in Q1 2025, down from 57% in Q1 2024 and 65% a decade ago in Q1 2015. There was also a fall in the proportion of homes bought by investors, who made up 10% of all buyers in Q1 2025, the lowest level since 2008.
Perhaps surprisingly, the biggest uplift in first-time buyers has come in the £300k+ price bracket. It’s here that new homeowners will see the biggest increase in their stamp duty bill. This group made up 26% of purchases over £300k in Q1 2025, up 4% year-on-year and more than double the proportion from 10 years ago.
The regional picture
London has seen the second-largest increase in the share of homes bought by first-time buyers, just behind Wales. New homeowners made up half of all buyers in the capital in Q1 2025, the highest proportion since our records began in 2007. This figure has risen from 43% in Q1 2024 and has nearly doubled over the last decade.
The average person purchasing a new home in the capital will see their stamp duty bill rise by £6,240. Despite first-time buyers now paying stamp duty above £300,000, London is the only region in the country where the average first-time buyer will pay.
Meanwhile, the North East and East Midlands are the only regions where first-time buyer purchases have fallen proportionally over the last year. The share of homes bought by a new homeowner in the North East fell from 27% in Q1 2024 to 12% in Q1 2025. Due to lower property prices, it’s here that both first-time buyers and movers are least likely to face an increase in their stamp duty bill post-April, which means we would have expected to see less change.
Discounts
Even though the stamp duty changes from 1 April are set to drag another 310,000 property transactions into paying tax and cause many other buyers to face bigger bills, we haven’t seen more buyers successfully negotiate bigger discounts on their purchase.
In fact, the average property in England & Wales sold for 99.0% of its final asking price in the first quarter of 2025, the second strongest asking to achieved value recorded in the first quarter of any year since our records began. In the first quarter of last year, the typical home sold at a 1.6% discount. In pound terms, the average home sold for £2,000 less than the final asking price in Q1 2025, down from £4,000 in Q1 2024. First-time buyers have gone from negotiating a £2,000 discount in Q1 2024 to a £0 median discount in Q1 2025. In fact, 29% of first-time buyers paid over the final asking price in Q1 2025, up from 27% in Q1 2024.
There are also no signs that first-time buyers are purchasing cheaper properties in a bid to offset a higher stamp duty bill. The average new homeowner spent £251,500 on their home, 3.1% more than in Q1 2024, which reflects broader price growth in the market.
London (-5.3%) and the North West (-0.1%) are the only regions where the typical new homeowner spent less than last year.
The fall in London partly reflects first-time buyers facing the steepest increases in stamp duty. They paid £424,780 for their first home in Q1 2025 on average, £23,950 less than last year, which more than offsets the £6,239 rise in their stamp duty bill. The share of first-time buyers purchasing a home in the capital for more than £425,000 (the old SDLT threshold) fell from 45% in 2024 to 40% in Q1 2025.
