24th June 2025The end of temporary Stamp Duty Land Tax (SDLT) – what has been the impact?

UK Property Transactions Data

In last year’s autumn budget, Rachel Reeves announced key changes to Stamp Duty Land Tax (SDLT) reliefs, and recent property transaction data demonstrates the impact of these changes.

This April 2025, the UK property market experienced a significant drop, with residential transactions decreasing by 64% from 177,440 in March 2025 to 64,680 in April. This sharp decline is not entirely unexpected, as with the end of temporary SDLT reliefs many rushed to buy in March to beat the impending changes.

Here are the key changes that drove this decline:

• The nil-rate band for SDLT being reduced from £250,000 to £125,000
• The first-time buyer exemption being cut from £425,000 to £300,000

The non-seasonally adjusted residential transactions also decreased by 66% in April 2025, relative to March 2025, and this is the highest month-on-month decrease since records began for non-seasonally adjusted figures.

Who has been affected?

Buy-To-Let Investors are particularly impacted by SDLT increases due to the thin margins, which are already strained by higher mortgage rates and reduced tax relief on interest. On top of this, upsizers and downsizers are impacted by increased tax on mid-to-high-value homes, which in turn freezes mobility across the housing chain.

Notably, the commercial sector hasn’t been as heavily impacted by SDLT changes, with seasonally adjusted non-residential transactions decreasing by just 16% relative to March 2025, while non-seasonally adjusted figures showed a 21% decline.

What does this drop in property transactions mean?

This drop in property transactions was not entirely unexpected, and a similar downturn has been seen with previous policy changes. For instance, similar drops in transaction volumes occurred when the second home surcharge was first introduced, and tax policy changes often create short-term market disruptions.

It is likely that transaction volumes will eventually return to average levels, and several factors support a more optimistic medium-term outlook. As interest rates are expected to reduce over time, the increased borrowing costs that have constrained many buyers should ease, potentially offsetting some of the impact from higher SDLT rates.

Supply and demand dynamics also suggest potential for recovery. With supply continuing to outweigh demand in many areas, reduced property prices could increase the pool of potential purchasers, particularly as the market adjusts to the new tax environment.

The forecast for the coming year appears more buoyant, with reduced prices expected to bring more buyers back into the market. However, this will depend on the government’s approach in the Autumn budget, and whether they will extend support measures to first time buyers.