The increase in stamp duty thresholds could be a ‘cliff-edge moment’ for first-time buyers (FTBs), according to the Yorkshire Building Society.

The society said that FTBs had made a strong entry in 2025 during the first quarter, but warned that the Government’s stamp duty changes will see many buyers paying thousands more and could change housing market fortunes if it deters them from buying.

Yorkshire Building Society’s analysis of data from CACI showed that Q1 this year saw the highest number of first-time buyer applications since the 2022 post-COVID peak, with a total of 125,648 FTBs applying for a mortgage between January and March.

The number of FTB transactions also increased 12% compared to Q1 2024, double the average year-on-year growth recorded for the same period since the stamp duty incentives were introduced in 2017.

Group economist for Yorkshire Building Society, Max Shepherd, said: “FTB transaction levels to the end of March 2025 were bolstered by people rushing to beat the 1 April deadline.

“However, given the first-quarter figure has risen steadily since the incentive was introduced in 2017, the risk now is that the higher purchase tax, coupled with high house prices and other costs, add up to a cliff-edge moment for a group of borrowers who power the entire market.”

Shepherd added: “Some FTBs will have missed the 31 March deadline for saving money and been disappointed. Others are coming to terms with having to save up even more to get purchase-ready, amidst already-stretched affordability.

“This means we could see activity tail off from Q2, and it just remains to be seen by how much. The added danger is that if this change also deters home-movers, there will be fewer homes available for FTBs to buy, which would in turn increase property prices further out of their reach.

“Concerted industry action is needed to ensure this unwelcome change doesn’t send the positive momentum built over the past eight years into reverse.”

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