Stamp Duty: The April 2025 Reversion
The temporary stamp duty relief introduced in September 2022 expired on 31 March 2025. From 1 April, the nil-rate threshold for standard buyers reverted from £250,000 to £125,000. For first-time buyers, the nil-rate threshold dropped from £425,000 to £300,000, and the maximum property value eligible for first-time buyer relief fell from £625,000 to £500,000.
In practice, this means a first-time buyer purchasing at £400,000 now pays £5,000 in stamp duty where they previously paid nothing. At £500,000 they pay £10,000. For standard buyers, a £300,000 purchase that cost £2,500 in stamp duty now costs £5,000. These are not trivial sums and have led to a predictable front-loading of completions in Q1 2025.
| Purchase Price | Standard Buyer (from Apr 2025) | First-Time Buyer (from Apr 2025) |
|---|---|---|
| £200,000 | £1,500 | £0 |
| £300,000 | £5,000 | £0 |
| £400,000 | £10,000 | £5,000 |
| £500,000 | £15,000 | £10,000 |
| £600,000 | £20,000 | £25,000 |
Mortgage Rates: Lower But Not Low
The average two-year fixed rate for a 75% LTV mortgage sits around 4.4–4.7% in March 2025, down from the October 2023 peak of around 6.1%, but still well above the sub-2% rates that were available in 2020–21. Five-year fixes are marginally cheaper, typically 4.1–4.4% at the same LTV.
Swap rates — the wholesale cost of fixed-rate lending — have remained stubborn despite the Bank of England cutting base rate from 5.25% to 4.5% over the past twelve months. Lenders are pricing in continued uncertainty rather than aggressively passing on cuts. The practical implication: don't assume a base rate cut automatically means a cheaper fixed deal at your next remortgage.
- ►High LTV lending has returned: 95% LTV products are widely available again at around 5.3–5.7%. The deposit barrier has lowered, though higher rates at that tier still mean tight affordability.
- ►Longer terms are common: 35-year mortgages have become standard as buyers stretch to meet affordability stress tests. This reduces monthly payments but substantially increases lifetime interest cost.
- ►Product transfers vs remortgaging: Many lenders offer product transfer rates that are 0.1–0.3% better than new customer rates. Worth comparing before you remortgage away from your existing lender.
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National average house price figures mask significant regional divergence. Nationwide's index for February 2025 showed annual growth of 3.9% nationally, but that headline obscures very different stories by region.
Northern England — particularly the North West, Yorkshire, and the North East — continues to outperform on growth, driven by relative affordability and improving transport connectivity. The South East and London have seen more muted appreciation, constrained by stamp duty costs and mortgage affordability at higher price points.
| Region | Annual Price Change (Feb 2025) | Avg. House Price |
|---|---|---|
| North West | +6.2% | £225,000 |
| Yorkshire & Humber | +5.8% | £210,000 |
| East Midlands | +4.7% | £255,000 |
| South West | +3.9% | £330,000 |
| South East | +2.4% | £410,000 |
| London | +1.8% | £530,000 |
Rental Market: Supply Tightens Further
The rental market continues to face a structural supply problem. Landlord exits — driven by higher mortgage costs, the additional stamp duty surcharge on purchases, and anticipated Renters' Rights Bill changes — have reduced available stock in many areas. Rightmove's rental data for Q1 2025 shows average asking rents outside London at £1,340/month, up 7% year-on-year.
London rental growth has moderated somewhat compared to the 2022–23 peak, but the stock shortage in inner boroughs remains acute. Tenants in competitive markets are still facing multiple-applicant situations for desirable properties.
The Renters' Rights Bill, which abolishes Section 21 'no fault' evictions and introduces a national landlord register, is expected to receive Royal Assent in mid-2025. The long-term supply effect is debated, but the short-term impact has been further landlord caution about new acquisitions.
Key Takeaways
- ✓Stamp duty thresholds reverted on 1 April 2025 — first-time buyers now pay duty on purchases above £300,000
- ✓Two-year fixed mortgage rates are around 4.4–4.7% at 75% LTV — down from peak but still historically elevated
- ✓Northern England continues to outperform on price growth; London and South East are more subdued
- ✓Rental stock shortages are driving 7% year-on-year rent growth outside London
- ✓The Renters' Rights Bill is expected to pass in mid-2025, abolishing Section 21 no-fault evictions