SDLT thresholds frozen: industry calls for urgent reform to unlock housing

Frozen thresholds hitting property market mobility

Stamp Duty Land Tax (SDLT) thresholds frozen since 2016 are becoming increasingly burdensome on property transactions, with industry leaders warning the tax structure is actively hindering the Government's housing ambitions.

Analysis from tax advisory firm Blick Rothenberg reveals the scale of fiscal drag affecting buyers. Whilst average UK house prices have risen by 28% over the past decade—from approximately £211,230 in May 2016 to £271,295 in May 2026—SDLT bills on purchases at average property prices have surged by over 106%, jumping from £1,725 to £3,565.

Mark Cunningham, partner at Blick Rothenberg, explained: "As SDLT fiscal drag is making it more expensive for people to move and therefore constricting the market's ability to grow, policymakers should ask whether the tax system is working against their own housing ambitions."

What index-linked thresholds would look like

Had SDLT thresholds moved in line with house price growth since 2016, the current structure would be substantially different. The nil-rate threshold would sit at approximately £160,500 rather than the current £125,000, whilst the £250,000 threshold would reach just above £321,000, and the £925,000 threshold would climb to almost £1.2m.

The financial impact compounds significantly at higher price points. A buyer purchasing a £1m property is paying nearly £6,600 more in SDLT than would apply under inflation-adjusted thresholds, whilst purchasers at the £2m mark face a differential exceeding £24,500.

Cunningham concluded: "A tax on movement has become more expensive and the market is not transacting at higher volumes." This stagnation directly undermines efforts to deliver the Government's target of 1.5m new homes, as reduced transaction volumes constrain market mobility and investor activity.

Builders demand immediate stamp duty cut

Housebuilder Bellway has added its voice to calls for reform, demanding an immediate reduction in stamp duty alongside a government-backed deposit scheme for first-time buyers. The appeal follows a trading update revealing softening demand signals: Bellway's forward order book fell to 4,206 homes at the end of July from 5,307 a year earlier, with values declining from £1.52bn to £1.2bn.

CEO Jason Honeyman stated: "With the near-term outlook remaining uncertain, we call on the Government to act now to improve access to housing across all tenures. An immediate reduction in stamp duty alongside a government-backed deposit support scheme for first-time buyers would both drive economic growth and accelerate the delivery of much-needed new homes across the country."

Clarity boost may support confidence recovery

The new Prime Minister's swift decision to rule out abolishing Stamp Duty has provided some reassurance to the market. Adam Jennings, head of residential at Chestertons, noted that buyer registrations had fallen sharply during the period of political uncertainty, declining 22% year-on-year to 1,740 across the firm's London network in July—the steepest drop since November.

"The clarity provided so quickly into Andy Burnham's tenure should, in theory, help people who are thinking of buying," Jennings said. "By ruling out changes to Stamp Duty in the upcoming Budget, the Prime Minister has removed a significant question mark for buyers."

However, the lack of proactive reform—rather than mere stability—leaves structural barriers in place. Investors considering BTL opportunities or identifying below-market-value deals continue to face elevated transaction costs. Those tracking planning alert activity for development opportunities will find SDLT costs eating into project returns.

Source: Property Industry Eye.