Homebuyers in the UK paid £848 million in Stamp Duty Land Tax (SDLT) in January 2025, marking a £40m increase from January 2024, according to an analysis by Coventry Building Society.

This rise is attributed to heightened market activity as buyers strive to complete transactions before impending tax changes.

The current SDLT nil-rate threshold of £250,000 is set to revert to £125,000 on 31 March 2025. This adjustment will raise the tax on an average-priced home in England from £2,028 to £4,528. First-time buyers will also be affected, with their relief threshold decreasing from £425,000 to £300,000.

In London, where the average first-time buyer property costs £473,282, the SDLT liability will increase from £2,414 to £8,664.

Since the temporary thresholds were introduced in September 2022, the Treasury has collected over £31.3 billion in property taxes.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Buying a home is about to get a lot more expensive. Those already in the middle of the buying process will be racing against time to beat the deadline. Those who can’t get the keys to their new house in the next five weeks need to brace themselves for a hit which could amount to thousands of pounds.

“Failing to beat the deadline may mean buyers need to eat into their savings to afford the tax hike on their home, or arrange to borrow more on their mortgage to cover the cost. Some buyers may even attempt to renegotiate the selling price so the seller ends up taking the hit, and some potential-buyers may be forced to hold off their purchases altogether.

“The pressure of the deadline will be felt by buyers across the market, with some having to make tough financial decisions in the weeks ahead. But the impact won’t stop on 1st April – higher costs may affect buyer behaviour for months to come. With buyers needing to factor in extra tax we could see a shift in demand, slower sales, and a knock-on effect on house prices.”