UK Housing Market
£40 Million Surge in Stamp Duty Receipts as Homebuyers Rush to Beat Tax Changes
Stamp Duty receipts reach £848M in January marking a 4.95% increase from 2024
David Hannah, Group Chairman of Cornerstone Tax, urges the government to scrap its stamp duty reforms and focus on addressing the wider housing affordability crisis
Adobe
“This year, the government must urgently recognise the ever-pressing need for drastic changes to the housing market..."
David Hannah, Group Chairman
Stamp duty receipts have surged by £40 million as homebuyers scramble to complete their purchases before stamp duty rates return to their pre-tax holiday thresholds on 31 March. According to HM Revenue and Customs (HMRC), January's Stamp Duty Land Tax (SDLT) receipts totalled £848 million, marking a 4.95% increase compared to the same month in 2024. In response to the government's measure, David Hannah, Group Chairman of Cornerstone Tax, the UK’s leading stamp duty advisory firm, urges the government to reverse its stamp duty reforms and address broader housing affordability crisis, which continue to put immense pressure on the housing market.
The looming changes will see the nil-rate threshold, which determines the value of property buyers can purchase without incurring stamp duty, drop from £250,000 to £125,000. This reduction will push the SDLT bill for an average-priced home in England from £2,028 to £4,528. Additionally, the first-time buyer relief threshold will also decrease from £425,000 to £300,000, further raising concerns among potential buyers. The Government has already collected over £31.3 billion in property tax since the temporary thresholds were announced in September 2022, with the current surge in receipts bolstering public finances ahead of the changes. David warns that this could trigger widespread fall-throughs and price renegotiations, further destabilising the market.
While Labour claims these reforms will improve affordability, David argues they will instead place an even greater financial strain on aspiring homeowners at a time of high interest rates and economic uncertainty. Rather than making homeownership more accessible, these policies risk pushing it even further out of reach. David also highlights that the UK government has missed key opportunities to tackle the country’s growing housing crisis. These include raising the second home surcharge to 5% and not reinstating Multiple Dwellings Relief. Exclusive data from Cornerstone Tax further underscores the impact of these stamp duty reforms, revealing that 26% of Brits already aren't unable to purchase property due to unaffordable stamp duty costs. Meanwhile, 15% of landlords are considering selling due to rising expenses, and 18% of prospective buy-to-let investors have been deterred by increasingly complex regulations.
Group Chairman of Cornerstone Tax, David Hannah comments:
“This year, the government must urgently recognise the ever-pressing need for drastic changes to the housing market. The previous government's decision to abolish Multiple Dwellings Relief (MDR) was beyond counterproductive and will result in fewer new homes being built, with a significant drop in both domestic and overseas investment into housing delivery.
“By removing a critical tax break such as MDR,the government's refusal to reverse this policy undermines the build-to-rent sector, which relies heavily on such incentives to maintain and expand the housing supply. Furthermore, the increase in the second home surcharge and Stamp Duty thresholds reforms will not only reduce the stock of homes in the UK, but will make it harder for first-time buyers to get onto the property ladder.
"New policies need to promote affordability, accessibility and support for businesses building in Britain.Thegovernmentmust now listen to property firms and industry stakeholders to solve this vitally discouraging situation for Brits, otherwise this crisis will continue to cause chaos for years to come."
David Hannah, Group Chairman
