- From 1 April, most homebuyers will pay more tax when buying a property
The property market saw a surge in activity last month as buyers rushed to get transactions over the line before the stamp duty rise on 1 April.
There were 108,250 property sales last month, according to His Majesty’s Revenue and Customs, a 13 per cent increase compared to January.
It was also a 28 per cent increase in sales compared to February 2024, which was in the aftermath of a mortgage rate spike.
Stamp duty will increase from next Tuesday. The nil-rate threshold, under which no stamp duty is paid, will drop from £250,000 to £125,000, returning to where it was before temporary changes were made in 2022.
This will increase the tax bill on the average-priced home in England from £2,028 to £4,528, according to analysis by Coventry Building Society.
First-time buyers will see their nil-rate band threshold drop from £425,000 to £300,000.
Need for speed: Many home buyers have been keen to complete before stamp duty goes up
This means instead of paying no stamp duty on a purchase worth £425,000, from April they will pay £6,205.
Tom Bill, head of UK residential research at Knight Frank, said: ‘The jump in February proves that nothing moves the housing market quite like a change in stamp duty.’
Nick Leeming, chairman of Jackson-Stops estate agents, added: ‘The start of 2025 was turbo-charged by the encroaching changes to stamp duty rates as buyers looked to take advantage of the savings on offer.
‘This was particularly prevalent across London and the South East where buyers could make the most savings.
He added that Jackson-Stops had seen a 70 per cent rise in completions in February 2025 compared to a year earlier.
What happens after the stamp duty deadline?
Looking ahead, some experts expect the stamp duty stampede to turn into a post stamp duty lull from next month.
This happened noticeably in July 2021 after the previous stamp duty holiday, which was in place during the pandemic, began to be phased out.
This resulted in average house prices falling by 4.7 per cent in one month from £242,777 to £231,386, according to Land Registry data, a dive of more than £10,000.
The stamp duty holiday was fully phased out on 30 September 2021, which resulted in another monthly fall of 2.5 per cent in October.
Knight Frank’s Tom Bill said: ‘The underlying reality feels reasonably stable but there are still risks in the shape of persistent inflation and stubbornly-high mortgage rates, unpredictable US trade policy and an autumn budget where speculation will focus on tax rises.
‘We expect UK prices to rise by 2.5 per cent this year.’
Tomer Aboody, director of specialist mortgage lender MT Finance points out that while there has been a sizeable jump in property transactions of late, sales are still below pre-pandemic levels.
He said: ‘This comparatively subdued activity illustrates how big an impact higher interest rates have had on the market.
‘As buyers look to the Bank of England for further rate reductions, any assistance here will help the upwards trajectory in transaction numbers as the year progresses.’