The Fallout of Stamp Duty Tax Changes

Whenever there’s a significant alteration in the market, we can see seismic ripples throughout the industry. The recent changes to the Stamp Duty Land Tax are one of such alterations that have caused waves throughout the market.

Before the cut-off date, first-time buyers in England and Northern Ireland weren’t required to pay any SDLT on properties up to £425,000 in value. This threshold has now been reduced to £300,000. Those who aren’t first-time buyers will now pay tax on properties over £125,000 in price, rather than the previous £250,000.

The fallout of the Stamp Duty Tax has highlighted several different areas.

Mortgage Completions Escalated 50% to Beat Deadline

According to Barclays, no month has seen more mortgage completions than September 2021, until now. March 2025 surpassed all previous figures, becoming the highest month in recorded history for mortgage completions.

In an attempt to beat the Stamp Duty deadline and avoid increased future fees, consumers flocked to the property market. Homebuyers now report needing an additional £13,530 on top of a property’s valuation to cover taxes and fees.

Record Stamp Duty Relief Claimed

As the Stamp Duty Land Tax (SDLT) deadline approached on 31st March, first-time buyers claimed a record number of stamp duty reliefs, rushing to beat the impending deadline. This is where consumers are exempt from paying SDLT or have a reduced tax liability.

With first-time buyers saving an average of over £5k each, equating to £243m in Stamp Duty Tax relief, we saw the highest figures involved since the relief scheme’s introduction in November 2017.

In 2024, this total figure stood at just £119m in comparison.

We can now expect a quieter period as the market reacts and recovers from the previously mentioned mortgage boom, which is expected to end ahead of the end of March. According to Nationwide, house prices fell in April following the SDTL changes, with a 0.6% decrease month-on-month.

Are we likely to see an upturn in this trend as the housing market adapts to the new changes?

Buy-to-Let Plummets to Record Low

Buy-to-let mortgage searches in April dropped to 14.7% of the overall market, emphasising the struggles landlords are currently facing in the market. This is the lowest figure we’ve seen since records began in January 2020.

Contrastingly, demand from first-time buyers made up almost a quarter of the market search activity. This trend has been observed for five consecutive months.

Is this drop caused by rising costs, consumers seeking permanent residency before the SDLT deadline, or a combination of factors?

Twenty7tec has highlighted the above figures and the need for advisers to remain vigilant, awaiting further developments. However, this activity raises the question: are we seeing a blip in the market, or is this the start of a shifting dynamic?

Despite the fall in buy-to-let product demand, we encourage advisers to diversify their offerings to adapt to new market trends. You can ride these market waves by utilising ancillary products like GI.

Improvise, Adapt, Overcome

Diversifying your offering isn’t just a helpful way to ensure a steady income; it’s ideal for staying ahead of the competition. Housing stability in the market has always been a consistent talking point for those in the industry, but Home Insurance is a product that will always be vital.

Whether consumers are first-time buyers or seasoned homeowners, there is a significant need for expert guidance from advisers such as yourself to stop the growing underinsurance problem affecting the UK.

With 76% of homes underinsured, the market is in dire straits, with homeowners across the country needing support to cover their properties.

To help bridge this gap, you can partner with us at Source to offer your clients high-quality Home Insurance products. Contact one of our Business Development Managers today.