Stamp Duty ‘doubles in a decade’, hitting 1.5 million homes

The Stamp Duty on an average home has more than doubled in a decade, wrecking hopes of 1.5 million new homes, accountants have warned.

Accountants Blick Rothenberg say frozen thresholds have pushed Stamp Duty on a typical purchase up by more than 100% in 10 years.

Meanwhile, the average value of a home in Britain rose by a relatively low 28% during the same period.

The group says the resulting fiscal drag is making it more expensive to move, choking the transaction volumes housebuilders need to justify new schemes.

A tax on movement has become more expensive and the market is not transacting at higher volumes.”

Mark Cunningham, a Partner at Blick Rothenberg, says that the frozen thresholds have “slowly dragged more of each transaction into higher tax bands’.

The group’s research  suggests that the average property price has climbed from around £211,230 in May 2016 to roughly £271,295 in May 2026, a rise of 28.4%.

Meanwhile, the average Stamp Duty paid has jumped from £1,725 to £3,565 during the same decade, an increase of 106.7%.

“A tax on movement has become more expensive and the market is not transacting at higher volumes,” Cunningham says.

Tax on movement

If thresholds had tracked house price growth since 2016, the nil rate band would now stand at about £160,500 rather than £125,000.

The £250,000 threshold would sit just above £321,000, and the £925,000 band would rise to nearly £1.2million.

The gap widens sharply at the top of the market. A £1million, a buyer pays almost £6,600 more than under indexed thresholds.

At £2million, the difference exceeds £24,500.

Profitable developments

Cunningham argues that policymakers needs to ask whether the tax system is working against their own housing ambitions.

“Builders will only build if there are enough buyers to make their development projects profitable,” he says.

However, he adds that the decade has been distorted by Covid, temporary Stamp Duty holidays, higher mortgage rates and affordability pressures.

“The data does not prove Stamp Duty alone is responsible,” he says. “However, the direction of travel is difficult to ignore.”