30 April 2025
If you are covering the latest property transaction data, please see the following comment from Karen Noye, mortgage expert at Quilter:
The surge in property transactions in March, as shown in today’s HMRC figures, is a textbook example of how stamp duty changes can artificially distort housing market activity. With thresholds reverting in April, buyers scrambled to complete purchases before facing higher tax bills. It’s no coincidence that residential transactions jumped over 60% compared to February as many were racing against the clock to get deals over the line.
But this morning’s latest Nationwide figures show the true ramifications of the stamp duty changes as it showed a 0.6% fall in property prices in April. These figures reflect a market adjusting to life after the stamp duty change. Given the time it typically takes to complete a property purchase, the vast majority of transactions benefiting from the old rates were agreed earlier in the year. The April price data is the first clean readout of post-change demand and it suggests that once the incentive disappeared prices have slipped.
This is not the first time we've seen stamp duty reform warp market trends. During the pandemic, temporary stamp duty holidays triggered a buying frenzy, only for activity to cool significantly once the relief was withdrawn. It’s a clear reminder that these changes, while politically convenient, often create short-term surges followed by sharp slowdowns.
More broadly, stamp duty continues to gum up the system. It discourages downsizing, traps people in homes that no longer suit their needs, and limits fluidity across the housing ladder particularly for older homeowners who might otherwise move. All of this compounds the issue of limited housing supply.
Given that stamp duty is not a particularly large revenue raiser for the Treasury, now would be a good time to take a longer-term view. While a reform is unlikely to be imminent, it's worth asking whether the current system is fit for purpose. A properly structured review could explore how to reduce the distortions the tax creates, especially when the market is already under strain from high borrowing costs and affordability pressures.
