Stamp Duty Land Tax (SDLT) was designed to raise revenue and cool overheated markets. But in today’s housing environment, it’s become a chokehold on mobility, investment, and supply—especially in high-demand areas like London and the South East.
At the heart of the problem is cost. A buyer purchasing a £600,000 home now faces a stamp duty bill of £20,000 (if not a first-time buyer). That’s on top of deposit requirements, legal fees, and mortgage costs. For upsizers and downsizers alike, the penalty is so steep that many stay put—clogging the system and freezing movement in the middle tiers of the market. It also has to be found ALL in cash. Who has a spare £20k down the sofa!?
Landlords and investors are hit even harder. The 3% surcharge introduced in 2016 pushed many out of the market. With rental supply shrinking and rents soaring, it’s clear the policy has backfired. Instead of deterring speculative buying, it’s reduced the number of available homes for renters—hurting the very people it was supposed to help. So what did the Government do? It raised it to 5%! So an investor buying that £600,000 home now has to pay £50,000!
Developers aren’t immune either. Stamp duty on bulk purchases discourages institutional investment in Build to Rent schemes—just when the UK needs more professionally managed rental housing.
Stamp duty is no longer a housing tax. It’s an anti-mobility tax. Until it’s reformed—or replaced—the market will remain jammed, unaffordable, and fundamentally broken.