More homebuyers will pay stamp duty in 2025, expected to hit house price growth by up to 1%, finds new analysis from Zoopla. 

From April 2025,  stamp duty rates in England and Northern Ireland will revert to previous levels, resulting in a 2% 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% of homebuyers will pay more stamp duty from April 2025, up from 49% paying today. 

The return of the 2% 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% of sales sit in this price range. In addition to the third of sales brought back into SDLT, the 49% 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% of first-time buyers liable to pay. This means 40% 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% of FTBs in the Eastern, South East and London regions looking to buy homes in the £300,000 to £425,000 price band.

Zoopla adds that 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 2% 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. 

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% off house price growth in 2025 hitting buyers in higher value markets and re-enforcing a north-south divide for price growth.”