Homebuyers have paid £5.5bn in Stamp Duty so far this year, which represents a 25% increase from the £4.4bn in the same period during 2024, says Coventry Building Society.

The dramatic increase follows the Government’s decision to cut the nil-rate threshold from £250,000 to £125,000 on 1st April, with buyers now facing higher bills when purchasing homes.

Jonathan Stinton (pictured), head of intermediary relationships at the lender, says homebuyers are handing over eye-watering sums in Stamp Duty as the tax on an average-priced home has reached £3,274, compared to £774 before the threshold was halved.

Market impact

The rise in Stamp Duty bills has raised concerns about the impact on market activity, with Stinton warning that the increased costs could deter buyers from making their next move.

He says: “When moving comes with thousands in tax, it can put people off making that next step – whether it’s upsizing, downsizing, or just finding a home that better suits their life.”

“That kind of strain doesn’t just affect individual buyers; it can slow the market down for everyone.”

And the monthly variations in SDLT receipts reveal the impact of the tax rise. Rather than generating more revenue, sales volumes fell and the tax take dropped from £1.3bn in April to £918m in May.

It’s hard to see how a tax designed for a different era is still the best fit for today’s buyers.”

Stinton points out that Stamp Duty was originally introduced in 1694 as a temporary measure intended to last just four years.

He says: “More than 300 years later we’re still paying it in one form or another, despite the fact the housing market has changed.”

“It’s hard to see how a tax designed for a different era is still the best fit for today’s buyers.”