Mortgage professionals say SDLT is freezing first-time buyers and downsizers out of the property market, with no government relief in sight
Stamp duty is among the biggest barriers to housing market activity in the UK – and the government shows no sign of addressing it.
That is the view of two mortgage professionals, who argue the current Stamp Duty Land Tax (SDLT) regime is suppressing transactions at both ends of the market and the political will to fix it remains absent.
Sebastian Murphy, group director at JLM Mortgages (pictured top left), told Mortgage Introducer stamp duty is killing the market. "You can speak to any bank, any economist – it's the same thing. It's a barrier to people moving at the top end and at the bottom end."
Murphy, whose company arranges around 12,000 mortgages a year, recently made that argument directly to government at a Building Sites Commission meeting with Baroness Taylor. "I sat down and said, ‘Look, I know you don't want to talk about stamp duty, but this is what's stopping people moving down market’. Because why would you spend more than £50,000 to move to a smaller house?"
The downsizing deadlock
Murphy's argument centres on older homeowners – those aged 55 or over – sitting in large family properties they want to leave, but for whom the cost of moving makes it financially irrational to do so.
"You've got all these family homes being lived in by one or two people who want to move," he said. "But why would they spend £50,000 to £100,000 to move to a smaller house, especially when they might need some of that money for medical or care home fees in the future?"
The knock-on effect is felt throughout the entire chain. Family homes are unavailable, supply is constrained, and prices are driven up for the buyers who need those properties most.
"No one should be paying the levels of stamp duty we do in the UK," he said. "I'm not saying abolish it – but it needs to come down to a sensible level, perhaps more in line with other countries in Europe."
Denni Tyson, founder of DT Financial (pictured top right), told Mortgage Introducer he sees the same reluctance among his clients. He revealed one of his clients recently weighed up a £12,500 stamp duty bill against staying put and renovating instead. "I think people are assessing the cost against the cost of moving," he said. "Are we able to do something with that money? Because it's dead money really. When you move you don't get anything out of it."
The first home burden
From 1 April 2025, the nil-rate threshold for first-time buyers was reduced from £425,000 to £300,000, with the maximum purchase price qualifying for relief falling from £625,000 to £500,000. For brokers operating across south-east England, that change has hit client costs immediately.
Tyson said the revised threshold makes little sense when set against actual property prices across much of England. "Look at London, Kent, Essex, Hertfordshire – £300,000 is quite standard now, frighteningly," he said. He described a young couple who recently purchased a new-build property in Kent for £400,000. Under the current rules, that purchase attracted a £5,000 SDLT bill – a charge that would have been zero under the previous £425,000 nil-rate band as recently as March 2025.
"We should be encouraging people to buy their first home, not taxing them to their eyeballs," he said. "You've got your solicitor bill, your survey. Buying a first home has always been expensive, but to throw stamp duty on top is a bit of a kick in the teeth."
In practice, Tyson finds himself steering clients accordingly. "I say to people, if you get something under £300,000, go and get it, because it will save you paying stamp duty. I know it's only £2,000, but when you're buying your first home, that's a lot of money."
Both mortgage professionals believe the nil-rate threshold for first-time buyers should rise to £500,000. Murphy ties this directly to the high loan-to-value products now available. "You've got lenders lending 97%, 98% mortgages," he said. "That only works if buyers don't then have to find £30,000 to £40,000 in stamp duty."
Proven but ignored
Murphy argued the economic case has already been proven, pointing to the post-pandemic stamp duty holiday and the lobbying of Sir Nigel Wilson, former chief executive of Legal & General, who argued that lower rates drive higher total receipts through increased transaction volumes.
"The amount of transactions it will create means Rachel Reeves will take more in stamp duty receipts," he said. "That's been proven – that is fact-based. So why wouldn't you go down that route?"
No new SDLT changes have been announced for 2026, and the rates introduced on 1 April 2025 remain in place. For Murphy, that inertia is the most frustrating part. "Nobody in our industry can see why Rachel Reeves is opposed to reducing stamp duty. It's nonsensical and ludicrous.”
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