The Conservatives’ promise to abolish stamp duty on primary homes has sparked sharp debate across the property sector — not least because the proposed reform explicitly excludes investors, second-home buyers and overseas purchasers.
Party leader Kemi Badenoch called stamp duty a “bad tax” during her closing speech at the Conservative Party Conference in Manchester, but her team moved quickly to clarify that the policy applies only to main residences purchased by UK residents in England and Northern Ireland.
A press release issued immediately after the speech confirmed that stamp duty will remain in place for additional properties, corporate purchases, and non-UK residents. Separate taxation regimes in Scotland and Wales mean the plan will not apply there.
While many estate agents welcomed the headline promise as a potential boost for the housing market, industry analysts warned that the fine print leaves property investors out in the cold — and could even freeze the market if the Conservatives surge in the polls before the next general election.
Tom Bill, Head of UK Residential Research at Knight Frank, said the proposal would have an immediate psychological impact on buyers and sellers.
“The move would undoubtedly have an immediate impact on the housing market,” he said. “But if the Tories are leading in the polls ahead of the next general election, the market could grind to a halt as buyers and sellers wait for the party to take power and abolish the tax before moving house.”
Analysts say that even the prospect of reform can cause transaction volumes to fall temporarily, as households defer purchases in anticipation of tax savings. That could put additional strain on agents, developers, and conveyancers already grappling with subdued activity and higher borrowing costs.
Lucian Cook, Head of Residential Research at Savills, said the policy’s effectiveness would depend heavily on whether it is accompanied by new measures to replace the lost tax revenue.
“If, and this is a big if, it is a simple tax giveaway, the likelihood is that the current stamp duty bill simply passes through into house prices,” Cook said.
According to Savills’ modelling, this would imply an average uplift in prices of around 2.8% — roughly £9,700 per property — though the impact would be unevenly distributed across the UK.
In regions such as the North East, where the average stamp duty bill is £2,623, the benefit would be modest. But in London, where the average bill is £32,208, the effect could be far greater.
| Region Average | Rate | Average House Price | Average SDLT Bill |
| London | 4.8% | £674,079 | £32,208 |
| South East | 2.9% | £432,130 | £12,393 |
| East of England | 2.4% | £383,845 | £9,069 |
| North East | 1.4% | £184,875 | £2,623 |
| Northern Ireland | 1.3% | £191,233 | £2,404 |
| England & NI (avg) | 2.8% | £350,127 | £9,729 |
Source: Savills using HMRC data (2021/22–2023/24)
Cook added that the removal of stamp duty could free up housing transactions, particularly among mortgaged homebuyers and downsizers — two groups disproportionately affected by the tax.
“With the reliefs already available, it would have the least impact on first-time buyers,” he noted. “The biggest effects would likely be among homeowners moving up the ladder or downsizing.”
Investors left behind
Crucially, the Conservatives’ plan does not apply to additional properties, meaning landlords and investors would continue to pay the higher rate of stamp duty — typically 3% above the standard rate.
For many property investors, this exclusion removes any potential incentive to expand or re-enter the buy-to-let market at a time when margins are already being squeezed by rising mortgage costs, stricter regulation, and falling yields.
The National Residential Landlords Association (NRLA) has previously warned that higher transaction costs have contributed to a net loss of over 300,000 rental properties from the private rented sector since 2016, intensifying pressure on tenants.
Industry observers suggest that while Badenoch’s proposal may provide a short-term political boost among homeowners, it risks deepening the imbalance between owner-occupier incentives and investment viability.
If enacted, the abolition of stamp duty on main residences would mark one of the most radical property tax reforms in a generation. But with property investors, second-home buyers, and overseas purchasers still firmly in scope, the measure is unlikely to reverse the structural challenges facing the housing market.
As Knight Frank’s Bill put it, “The impact may be immediate — but the benefits could be short-lived.”
