First-time buyers are increasingly being drawn into paying stamp duty as rising purchase prices push more transactions above the £300,000 threshold, Connells Group has found.

Research from the group shows 30% of first-time buyers in England are now purchasing homes above £300,000, the highest share on record and up from 15% a decade ago.

The shift means more first-time buyers are facing a stamp duty bill since thresholds changed in April 2025. In the first quarter of 2025, just 10% of first-time buyers in England were purchasing above the previous £425,000 nil-rate band.

London remains the most exposed market, with 78% of first-time buyers now buying above £300,000 and therefore paying stamp duty. Connells said this was the highest share of any region and five percentage points higher than a year earlier.

Back in the first quarter of 2025, just 9% of London first-time buyers paid stamp duty by purchasing above the previous £425,000 nil-rate band. For those who do pay, the average SDLT bill now stands at £12,690.

Aneisha Beveridge, research director at Connells Group, said: “For a growing number of first-time buyers, getting onto the housing ladder means saving for more than just a deposit.

“Stamp duty is becoming a bigger part of the upfront cost of buying, particularly as more people purchase their first home later in life and opt for larger, more expensive properties that can meet their needs for longer.

“At a time when affordability is already stretched, stamp duty costs create yet another hurdle for households trying to make the numbers stack up.

“The end of the previous stamp duty holiday in April 2025 has been particularly painful in London and the South, where the reduction in thresholds has pulled a much wider share of new homeowners into paying tax.

“In the capital, especially, even some of the most modest two-bedroom flats are being caught, while high transaction costs are also encouraging more first-time buyers to future-proof their move, rather than risk a more expensive step up later.

“Weaker market conditions have given first-time buyers a little more room to negotiate, and many are using that to try to stay out of paying full stamp duty rates. But that also highlights how these cut-offs can distort behaviour.

“With nearly half of purchases in the capital being made by a first-time buyer, the £500,000 limit where first-time buyers lose all their relief, is increasingly shaping the pricing of homes coming onto the market.”

REGIONAL PRESSURES

Outside London, Connells said the East of England and the South East also stood out, with 40% and 38% of first-time buyers now purchasing above £300,000 respectively.

Buyers in those regions face some of the highest average bills outside the capital, at £4,440 in the East of England and £5,130 in the South East.

The trend is also becoming more visible in less expensive markets. Connells said 14% of first-time buyers in the North West, up three percentage points year on year, and 13% in the West Midlands are now paying stamp duty.

Across England, the average stamp duty bill for first-time buyers paying the tax now stands at £7,340.

CHANGING BUYING PATTERNS

Connells said the rise in first-time buyers paying stamp duty in London increasingly reflected changing behaviour rather than simply rising prices.

More buyers are purchasing later in life and looking beyond central locations towards outer London markets, where they can buy larger homes and where price growth has held up better.

This year, half of first-time buyers in London bought a home with three or more bedrooms, up from 43% a decade ago. Connells said this suggested many were trying to future-proof their move and avoid the transaction costs associated with trading up later.

Nearly a third of first-time buyers purchasing a one-bedroom home in London are now paying stamp duty, while most first-time buyers buying homes with four bedrooms or more are also falling within the threshold.

BUYERS NEGOTIATE AROUND THRESHOLDS

Connells said first-time buyers were using weaker market conditions to negotiate larger discounts.

Since the end of the stamp duty holiday in March 2025, the average asking price of homes purchased by first-time buyers has risen by 5.0%. However, the average price actually paid by first-time buyers has increased by just 0.7%.

First-time buyers are now paying 96.9% of the initial asking price, down from 97.9% in March 2025, producing an average additional saving of £2,690 per purchase.

The research also found that 32.6% of first-time buyers in England are securing a discount of more than 5% off the initial asking price, up from 24.3% in the month before the stamp duty changes.

The share negotiating 10% or more off the initial asking price has risen from 9.1% to 12.2% over the same period.

Connells said this negotiating power was helping some first-time buyers remain below the £500,000 stamp duty relief limit. Nationally, 36% of first-time buyer offers on homes originally priced above £500,000 were ultimately agreed at £500,000 or less.

In London, 48% of first-time buyer offers on homes priced above £500,000 were negotiated down to meet or beat the threshold. Across England, 50% of first-time buyer offers on flats originally priced above £500,000 were agreed at or below the threshold, compared with 29% for houses.