Stamp Duty Warning as UK Households Face 'Extra £7,000' Burden
Thousands of pounds in stamp duty payments by first-time buyers, despite available discounts, have been detailed by HMRC in newly released figures.
The information came to light following a freedom of information request conducted on behalf of the money management application Plum. The request specifically examined stamp duty payments made by individuals who qualified for first-time buyer relief during the 2024-25 financial year.
Average Payments and Changing Relief
The analysis discovered that the average stamp duty amount paid by first-time buyers who claimed relief but still had liable transactions in 2024-25 was £4,073. This comes as stamp duty discounts have become less generous for certain home purchasers since April 2025.
Rajan Lakhani, a personal finance specialist at Plum, commented on the findings. "Stamp duty has long been one of the most despised taxes," he stated. "The hardship experienced by first-time buyers is especially severe, considering the financial obstacles they already encounter in accumulating a deposit."
Lakhani provided a specific example: "Last year, HMRC's data shows 12,000 first-time buyer transactions where relief claimants faced stamp duty bills under £2,000. That amount could have been covered using the free money generated from maximizing the annual Lifetime ISA allowance over two years."
Regional Disparities and Mounting Pressure
Aneisha Beveridge, research director at Connells Group, highlighted the growing strain. "Saving for a deposit remains the most significant challenge for most first-time buyers," she explained. "However, for an increasing number, the stamp duty bill awaiting them at completion is adding substantial additional pressure."
Beveridge revealed concerning statistics from the Connells Group network. Approximately one in four (26%) first-time buyers purchased a home exceeding £300,000 last year, pushing them into stamp duty liability. This marks a sharp increase from 2017, when the £300,000 nil-rate band was introduced and the figure was closer to one in seven.
The situation varies dramatically by location. In London, where the average first-time buyer spends about £440,000, a staggering 77% are now purchasing properties above the stamp duty threshold.
"For many in the capital," Beveridge continued, "this translates to finding an extra £7,000 for stamp duty. This sum is roughly equivalent to just over three months' rent in London, piled on top of an already substantial deposit requirement."
A Glimmer of Market Hope
Despite these financial hurdles, Beveridge noted some positive recent trends. "The market has felt somewhat more favorable in recent months," she observed. "Mortgage rates have been gradually declining, and wage growth has remained resilient. These factors have collectively assisted more prospective buyers in taking the decisive step onto the property ladder."
The data underscores the complex financial landscape facing new entrants to the UK housing market, where relief schemes provide only partial shelter from significant tax obligations.
