A record proportion of first-time buyers are now paying stamp duty as rising property values push more purchases above the £300,000 threshold where tax relief begins to reduce.
Fresh analysis by Connells Group shows that 30% of first-time buyers in England purchased a home costing more than £300,000 this year, double the proportion recorded a decade ago and the highest level on record.
The increase has become more pronounced since changes to stamp duty thresholds introduced in April 2025. Prior to the reforms, only 10% of first-time buyers were purchasing above the previous £425,000 nil-rate threshold.
London remains the region most affected, with 78% of first-time buyers now purchasing above £300,000 and therefore liable for stamp duty. The average stamp duty bill for first-time buyers in the capital now stands at £12,690.
Outside London, 40% of first-time buyers in the East of England and 38% in the South East are also purchasing above the threshold. The trend is increasingly visible in more affordable regions, with 14% of first-time buyers in the North West and 13% in the West Midlands now paying stamp duty.
Despite the additional tax burden, first-time buyers appear to be securing larger discounts from sellers. Since the end of the stamp duty holiday in March 2025, asking prices for homes purchased by first-time buyers have increased by 5%, while the average price paid has risen by just 0.7%.
The data shows first-time buyers paid an average of 96.9% of the asking price in May 2026, compared with 97.9% before the stamp duty changes, resulting in an average saving of £2,690 per purchase.
More than a third of first-time buyers making offers on homes initially listed above £500,000 were also able to negotiate the agreed sale price down to £500,000 or below, allowing them to remain eligible for first-time buyer stamp duty relief.
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.”
