Tom Goddard, a Senior Associate said:

The statistics show there were 77,480 more residential property transactions valued over £40,000 in March 2025 than in the same month the previous year. The surge was caused by people rushing to complete transactions before the tightening of the SDLT thresholds and rates which kicked in from 1st April 2025. As a result, SDLT receipts soared, with the Treasury collecting £349 million more in March 2025 than in March 2024.

The reforms were designed to increase revenue and address concerns that SDLT had become overly generous at the lower end of the market. Buyers’ eager to avoid the additional SDLT burden rushed to complete purchases before the deadline, fuelling a short-term boom. Sellers, meanwhile, took advantage of the demand spike, which led to a short-term property premium.

The April SDLT revision changed the 0% threshold (nil rate band) for residential property purchases from £250,000 to £125,000. First-time buyers have also seen the threshold at which SDLT kicks in for them reduce (at 5%) from £425,000 to £300,000.

Because of this, we are likely to see a chilling effect on both transaction volumes and house prices in next month’s statistics. As the SDLT rise is likely to deter both first-time buyers and those looking to upsize, particularly in areas where price points are just above the new SDLT thresholds. As transaction volumes fall, downward pressure on prices could intensify.

Unless other housing or tax policy measures are introduced, we could see a pronounced cooling in the UK property market across all price points, as although the change in SDLT rates primarily impacts lower-price properties, transactions in this sector of the market are an integral foundation for sales in all other price segments.

But the Treasury may welcome the increase in SDLT receipts, even if it is temporary, as it continues to grapple with broader fiscal pressures, and given that the Government’s borrowing requirements for FY25 were provisionally £11bn higher than originally budgeted for by the Office of Budget Responsibility.

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