What the April 2025 Stamp Duty Changes Mean for Property Investors

It has been just over two months since the stamp duty thresholds reverted to pre-2022 levels and the impact on the market is already being felt.

From 1st April 2025, buyers in England and Northern Ireland are now paying stamp duty on properties priced over £125,000 (down from the temporary £250,000 threshold). For first-time buyers, the tax-free allowance was reduced from £425,000 to £300,000. For buy-to-let investors purchasing a second property will now cost an additional stamp duty surcharge on top of current rates. These changes have reshaped buying strategies for both investors and homebuyers alike.

So, what does this mean if you are considering investing in a property right now?

The New Stamp Duty Landscape

Here is a quick summary of what buyers are now dealing with:

Standard purchases (main residence, non-first-time buyers)

Nil-rate threshold has reverted from £250,000 to £125,000 as of April 1, 2025.

The new SDLT bands are:

0% up to £125,000
2% on the portion from £125,001–£250,000
5% on £250,001–£925,000
10% on £925,001–£1.5 million
12% above £1.5 million ([gov.uk][1])

First-time buyers

0% SDLT up to £300,000, down from £425,000.
5% on the portion between £300,001 and £500,000.
No relief for properties priced above £500,000.

So, a first-time buyer of a £400,000 home now pays:

0% on £300,000 = £0
5% on £100,000 = £5,000

Investors & second-home buyers

The 5% additional property surcharge remains but applies on top of the updated base bands.

Their effective rates are:

5% on the first £125,000
7% on £125,001–£250,000
10% on £250,001–£925,000

Example: Investor buying a £300,000 house:

5% on first £125,000 = £6,250
7% on next £125,000 = £8,750
10% on remaining £50,000 = £5,000

Total = £20,000, a sizeable jump compared to previous rules

What Are We Seeing in the Market?

In the lead-up to April, there was a noticeable surge in buyer activity, especially in the sub-£425,000 segment. Many investors and homebuyers rushed to complete deals before the threshold dropped, particularly those using auctions to secure fast completions.

Now, post-April, we’re seeing a more nuanced picture:

Demand is cooling, especially among first-time buyers struggling with affordability.
Investor interest remains strong, particularly for properties with high rental yields and long-term capital growth.
Sellers are adjusting expectations, especially in regions where stamp duty has noticeably altered buyer behaviour.

While there has been no dramatic price drop so far, certain markets—particularly in outer London and regional hubs—are experiencing more price sensitivity.

What Should Investors Be Thinking About Now?

Despite the higher upfront tax costs, there are still compelling reasons to buy property now, especially for seasoned investors:

Rental yields are holding firm and, in some cases, increasing due to rising tenant demand and constrained supply.
While still relatively high, interest rates are expected to fall modestly by the end of the year, improving affordability for mortgage-backed purchases.
Capital appreciation remains a long-term driver, particularly in high-demand, regeneration-led areas.

While the reduced thresholds mean stamp duty bills are higher, these can often be absorbed into the overall investment strategy, particularly where below-market deals are available (and auctions are a key source of those).

Auctions: Still the Smart Play?

Absolutely. One of the biggest advantages of buying through auction is speed—and speed still matters.

Whether you’re looking to:

Recycle capital quickly
Acquire properties before competition heats up again
Or simply avoid lengthy completion delays

…auctions offer a clear path forward.

Many lots selling under the £250,000–£400,000 range still represent excellent value and despite the tax shift, are attracting strong investor interest because of their rental income potential or development upside.

What Next?

With the new stamp duty regime, investors must adjust their numbers – not abandon the market.

In fact, some investors are now using the lull in activity as an opportunity to strike while others hesitate perhaps sensing that prices may be reducing.

Thinking of Buying or Selling?

Whether you are exploring your next investment or considering selling a property, Auction House London offers:

A wide range of investment-ready lots
Fast completion timelines
Expert support from property professionals who understand the current landscape

Browse our latest catalogue, or get a free property valuation, or speak to our team about your investment goals.

The market has shifted. The smart money is shifting with it.