First-time buyers are quietly gaming the UK’s stamp duty system – and it’s working
In the year since the temporary stamp duty relief for first-time buyers expired, a subtle but significant shift has taken hold in the UK housing market. Aspiring homeowners are increasingly targeting properties priced under £300,000 to completely avoid the tax altogether.
New data from Barclays shows that in February 2026, properties valued under £300,000 accounted for 68.5% of first-time buyer purchases – a notable rise from 60.9% in February 2025, representing a 7.6 percentage point increase year-on-year.
This pivot comes after the government’s decision to end enhanced thresholds in March 2025, reverting first-time buyer relief to zero stamp duty on homes up to £300,000, with a 5% rate applying to the portion between £300,001 and £500,000.
By focusing on homes below the key £300,000 threshold, buyers sidestep thousands in upfront costs. For a £320,000 property, for instance, a first-time buyer would now owe £1,000 in stamp duty whereas staying under £300,000 means paying nothing.
In higher-priced regions like London and the South East, where average prices often exceed this level, the incentive pushes buyers toward more affordable areas, smaller properties, or even compromises on location to secure the full exemption.
Barclays’ mortgage completion data underscores this behavioural change, with first-time buyers showing a growing preference for “forever homes” such as semi-detached or detached houses, which made up 48.8% of purchases over the past 12 months, rather than flats (18.2%). This suggests many are opting for properties that fit both their lifestyle needs and the stamp duty sweet spot.
Broader affordability concerns
A separate Barclays survey highlights how external factors compound the challenge: people with student loans, for example, are saving significantly less toward deposits.
Those actively building a house deposit with outstanding student debt report setting aside £310 per month on average, compared to £473.70 for those without loans – a monthly gap of £163.70 that adds up to nearly £2,000 less per year..
Among graduates with debt, 41% say repayments are blocking their entry into the housing market, while 44% feel the debt hinders long-term financial stability.
“Rising external costs are reshaping how the UK approaches homeownership. Student loan repayments are slowing deposit saving for many aspiring buyers, while volatile energy prices are forcing households to think much harder about the long-term running costs of their homes,” said Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays.
By zeroing in on sub-£300,000 homes, first-time buyers are effectively “gaming” the system – legally optimising their purchase to minimise tax liability and stretch their savings further.
This trend has helped sustain transaction volumes despite the post-relief slowdown that followed a surge in early 2025 purchases, Barclays said.
