Stamp duty on an average property purchase in Britain has increased by more than 100% over the past decade, while house prices rose by just 28%, according to analysis by accountancy firm Blick Rothenberg.
The firm’s research indicates that frozen tax thresholds have created a fiscal drag, pushing a larger proportion of each transaction into higher tax bands as property values have climbed. This trend has implications for housing transaction volumes, which developers rely on to justify new construction projects.
Threshold freeze drives tax increase
Between May 2016 and May 2026, the average property price in Britain increased from approximately £211,230 to £271,295, representing a 28.4% rise. During the same period, the average stamp duty payment jumped from £1,725 to £3,565, an increase of 106.7%.
Mark Cunningham, a partner at Blick Rothenberg, noted that frozen thresholds have “slowly dragged more of each transaction into higher tax bands.” He added: “A tax on movement has become more expensive and the market is not transacting at higher volumes.”
Had thresholds been indexed to house price growth since 2016, the nil rate band would now stand at approximately £160,500 rather than £125,000. The £250,000 threshold would be just above £321,000, and the £925,000 band would rise to nearly £1.2 million.
Impact on higher-value transactions
The divergence between actual and indexed thresholds becomes more pronounced at higher price points. A buyer purchasing a £1 million property now pays almost £6,600 more in stamp duty than would be the case under indexed thresholds. At £2 million, the difference exceeds £24,500.
Cunningham suggested the tax structure may be working against government housing targets. “Builders will only build if there are enough buyers to make their development projects profitable,” he said. The analysis comes as estate agencies face declining profit margins across the sector.
Market context
Cunningham acknowledged that the past decade has been affected by multiple factors, including the Covid-19 pandemic, temporary stamp duty holidays, higher mortgage rates, and broader affordability pressures. “The data does not prove stamp duty alone is responsible,” he stated. “However, the direction of travel is difficult to ignore.”
The analysis suggests that the tax burden on property transactions has grown disproportionately compared to underlying price growth, potentially affecting market liquidity. With recent changes to rental market legislation also impacting the sector, the cumulative effect of tax and regulatory changes continues to shape the UK property landscape.
The findings raise questions about whether current stamp duty policy supports or hinders government objectives to increase housing supply and transaction volumes in the market.
