Cutting stamp duty charges for property traders would inevitably lead to thousands more homes being bought and sold each year.
A new study, carried out by Volterra for national home buying company Spring, found that removing the Higher Rate for Additional Dwellings (HRAD) surcharge for corporate traders could increase housing transactions by 178%. A full Stamp Duty Land Tax (SDLT) exemption could add as many as 168,000 extra property sales annually.
Property traders buy homes for short periods to keep chains moving, but they currently pay the same extra stamp duty charges as second-home buyers and portfolio landlords.
The report says the additional tax is reducing activity in a market already struggling with stalled chains and failed deals. Around 30% of agreed sales collapsed in 2024, often leaving sellers thousands of pounds out of pocket in legal, survey and moving costs.
Researchers said SDLT acts as a barrier to movement across the housing market, with modelling suggesting that every 1% rise in the tax cuts annual transaction levels by around 3.5%. Downsizers, families moving to larger homes and people relocating for work are among those most affected.
While some stamp duty relief is available when traders buy new-build homes, the report says most second-hand property purchases still attract the five percentage point HRAD surcharge, limiting traders’ ability to support chains and complete deals.
Shane Miller-Bourke, co-CEO of Spring, said: “Without a more liquid housing market, it will be impossible to unlock the scale of delivery the new homes sector urgently needs.”
“Modest SDLT reform focused on liquidity could deliver outsized results,” added Miller-Bourke. “And given the scale of the housing challenge we face, we need to be pulling levers at both the supply and demand side.”
