A record 30% of first-time buyers in England are purchasing homes above £300,000, meaning they must now pay Stamp Duty, according to new analysis from Connells Group.
The figure has doubled over the past decade and comes little more than a year after changes to Stamp Duty thresholds brought significantly more buyers into the Government’s tax net. Before the changes took place in April 2025, just 10% of first-time buyers were purchasing above the previous £425,000 nil-rate band.
The findings highlight the growing financial barriers aspiring homeowners are facing. Alongside deposits and mortgage affordability requirements, a rising number of buyers must now also find thousands of pounds to cover a Stamp Duty bill before they can complete a purchase.
More than just a deposit
Connells Group Research Director Aneisha Beveridge says:
“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.”
London is the region most affected by the changes. Nearly four out of five first-time buyers (78%) now purchase above £300,000 and pay Stamp Duty, up five percentage points year-on-year. The average bill is £12,690.
Trend is spreading beyond the capital
However, the trend is spreading beyond the capital. In the East of England, 40% of first-time buyers now pay the tax, while the figure reaches 38% in the South East. Even regions traditionally considered more affordable are seeing more buyers drawn into the tax net, including the North West (14%) and West Midlands (13%).
The increasing sums involved are also changing buyer behaviour. More first-time buyers are purchasing later in life and looking for homes that can meet their needs for longer, reducing the likelihood of a costly move further down the line.
First-time buyers purchasing bigger homes
The trend is particularly noticeable in London, where half of first-time buyers now purchase homes with three or more bedrooms, compared with 43% a decade ago. Rather than taking a first step onto the housing ladder before trading up, many appear to be stretching further financially to secure a home that can accommodate their long-term plans.
The research also suggests buyers are becoming increasingly price-sensitive. Since March 2025, the average asking price of homes purchased by first-time buyers has risen by 5%, yet the average price paid has increased by just 0.7%.
By May 2026, buyers were paying 96.9% of the initial asking price, compared with 97.9% before the Stamp Duty changes. That difference equates to an average saving of £2,690 per purchase.
Driving up demand in rental sector
Many buyers are also negotiating specifically around tax thresholds. Nationally, 36% of first-time buyer offers on homes originally marketed above £500,000 were ultimately agreed at £500,000 or below, allowing purchasers to retain first-time buyer Stamp Duty relief.
The effects of these growing barriers to homeownership are also evident in the lettings market. As the cost of entering homeownership continues to rise, more households are remaining in rented accommodation for longer, adding to already high levels of tenant demand. HomeLet’s latest Rental Index shows average UK rents rose by 2.1% annually in April to £1,325, with not a single region reporting a monthly fall in rents.
