In early 2025, the UK housing market experienced a noticeable rebound in transaction activity. But contrary to expectation, this uptick wasn’t driven by a new policy incentive — rather, it was fuelled by urgency ahead of the expiry of temporary stamp duty relief.
With the government’s pandemic-era thresholds set to revert in April 2025, many buyers rushed to complete purchases before higher stamp duty bills came back into effect. As a result, Q1 2025 saw one of the busiest quarters since pre-COVID levels, particularly among first-time buyers and second movers.
In this article, we explore what happened, who benefited, and what the landscape looks like post-April 2025.
The 2025 Threshold Reversal: What Changed?
As of 31 March 2025, the temporary relief introduced in 2022 ended. Key changes included:
- Main SDLT threshold reverted from £250,000 to £125,000
- First-time buyer relief dropped from £425,000 to £300,000
- First-time buyer price cap returned to £500,000
- No change to 3% investor surcharge on second homes or BTL
This marked a significant increase in tax liability across the board. For example, a first-time buyer purchasing a £350,000 home now faces a £2,500 stamp duty bill, up from zero under the temporary regime.
Q1 2025: A Rush to Complete
| Buyer Type | Observed Activity | Notes |
|---|---|---|
| First-time buyers | Surge in Q1 completions | Taking advantage of relief before deadline |
| Second steppers | Active in sub-£500k band | Trading up with urgency |
| Investors | Selectively participating | Targeting completions under £250k threshold |
| Developers | Pushing incentives | Encouraging exchange and completion pre-April |
Estate agents and lenders reported an 18% spike in completions in February and March, as buyers moved quickly to avoid higher tax costs. Developers offered incentives to fast-track deals, and solicitors reported widespread pipeline pressure as the deadline neared.
What Happens Next?
With the thresholds now back to their pre-2022 levels, the average home in every English region is now liable for stamp duty — even in lower-cost areas like Yorkshire and the North West.
This is expected to lead to:
- A short-term dip in transaction volumes from April to June
- Increased use of shared ownership and Help to Buy alternatives
- Stronger focus on yield and total cost of acquisition among investors
However, with mortgage rates continuing to ease and wages rising, buyer appetite is expected to resume gradually by late 2025, albeit with adjusted expectations.
Where Momentum Held Up
| Region/City | Q1 Buyer Enquiries ↑ | Lead Segments |
|---|---|---|
| Manchester | +17% | FTBs, dual-income professionals |
| Birmingham | +14% | Relocators, upgraders |
| Leeds | +12% | Buy-to-let & second steppers |
| East London | +9% | Flats under £400k |
| Liverpool | +11% | Investor-led activity |
Source: Zoopla, Ethira Analytics, Q1 2025
Investor Takeaways
Despite the end of stamp duty relief, opportunities still exist, particularly for:
- SPV buyers acquiring below the £250k range
- High-yield units in the North and Midlands
- Tenanted or turnkey stock, minimising acquisition friction
Ethira’s strategy team is focused on sourcing assets that combine yield resilience with tax efficiency, particularly in price bands still benefiting from minimal stamp exposure.
Final Thoughts
While 2025 hasn’t delivered new stamp duty incentives, it has reminded the market how powerfully policy deadlines shape demand.
Q1’s rebound was real — and now the market must adapt to new thresholds, tighter margins, and a return to value-focused investing.
For well-advised buyers and landlords, that creates opportunity — not retreat.