UK Stamp Duty: Housing Market Holds Firm

Resilient Property Sector Defies Expectations

Despite forecasts of a market slowdown, the UK stamp duty reversal hasn’t shaken the UK property sector’s stability. The change pulled more buyers into the tax net. However, better mortgage deals and strong demand helped offset the impact.

As of 1st April 2025, the stamp duty nil-rate threshold reverted to £125,000 – a rollback from the temporary increase introduced in 2022. Many anticipated this would cause a sharp dip in activity. Yet, data suggests that while there was a pre-deadline rush in transactions, the overall market has continued with surprising strength.

Pre-April Surge Followed by Stability

In the lead-up to the stamp duty adjustment, the housing market saw a burst of activity. Buyers, lenders and estate agents worked at full tilt to finalise purchases before the end of March. Once the deadline passed, however, the market did not stumble.

Figures from Propertymark’s Housing Insight Report show a slight drop in registered buyers in April, averaging 87 per branch. However, this figure aligns with historical norms and closely matches numbers from the same period last year.

Similarly, the average number of viewings per property dipped modestly to 2.3 per home in April, down from March’s high but still within the normal range. This consistency suggests that demand remains healthy, even in the face of added stamp duty costs.

A More Balanced Market: UK Stamp Duty

One of the more notable shifts has been on the supply side. Over recent months, the volume of homes coming to market has improved, relieving some of the pressure on buyers and contributing to more stable price growth.

Propertymark reported little change in new property listings after the stamp duty change. In fact, branches averaged 13.6 listings in April.

Stock levels, too, have held firm, with branches reporting an average of 42 properties available. Market appraisals – which give a glimpse of future stock – saw a small rise to 27 per branch in April, up from 24 the month prior. This suggests that sellers remain confident about bringing homes to market, and that further listings could be on the horizon.

Beyond Stamp Duty: Mortgage Deals Boost Market Confidence

Propertymark CEO Nathan Emerson remarked that while the end of the stamp duty rush was bound to slow activity somewhat, the broader picture remains encouraging.

“Improved mortgage rates, a steady stream of approvals and a confident pool of buyers all point to a resilient housing sector,” he said. “Despite economic headwinds, the appetite for homeownership remains strong.”

Amanda Bryden, Head of Mortgages at Halifax, echoed this sentiment. Last month’s Halifax House Price Index reported a 3.2% annual increase in UK property values for April – the highest growth rate this year – pushing the average price to £297,781.

Bryden noted that although the early-year transaction surge was driven by buyers eager to avoid the tax hike, this flurry did not result in inflated prices. Instead, the market has experienced a rare period of price stability not seen since the pandemic.

“Buyer interest has cooled slightly since March, but remains robust compared to recent years,” she added.

Interest Rates Hold Steady: UK Stamp Duty

Another key factor underpinning market stability is the Bank of England’s decision to hold the base rate at 4.25%. While some prospective buyers had hoped for a rate cut before proceeding with purchases, the hold has not significantly dampened overall activity.

Mortgage lenders have continued to adjust their offerings in a competitive environment, with some deals becoming more favourable in recent months. This has helped offset the cost burden introduced by the stamp duty changes.

A Reminder of the Stamp Duty Update

To recap, the stamp duty change came into effect on 1st April 2025. The nil-rate band – the amount you can pay for a property before stamp duty applies – was reduced from £250,000 to £125,000, reverting to its pre-September 2022 level.

Under the new rates:

• Buyers now pay 2% stamp duty on the portion of a home’s value between £125,001 and £250,000.
• Properties over £250,000 continue to follow a tiered rate system.
• Second homes and buy-to-let investments incur an additional 3% surcharge.

This has inevitably increased the tax burden on many buyers, especially first-time buyers and those purchasing in lower-priced areas. Even so, buyer sentiment and lender activity suggest the market is adapting.

Outlook: Steady as She Goes

Despite tax changes and ongoing economic uncertainty, the UK housing market continues to demonstrate remarkable resilience. Improved mortgage availability, stable interest rates and a balanced supply-demand dynamic have created a surprisingly robust environment.

Rather than a post-stamp duty slump, the market has shifted into a more sustainable pace – a welcome change after several years of extreme volatility.

As long as mortgage rates remain competitive and confidence holds, the outlook for the UK housing market remains cautiously optimistic.