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Stamp duty is the bill a stretched mortgage cannot cover

ended 10. September 2026

The Bank of England published its Mortgage Lenders and Administrators Statistics for 2026 Q2 on 8 September 2026, drawn from around 340 regulated mortgage lenders and administrators. The share of gross mortgage advances with loan-to-value ratios above 90 per cent rose to 8.4 per cent, the highest share since 2008 Q2. That is a share of new lending by value, remortgages included, not a count of buyers.

The Bank's release is about lending, not tax; the connection here is ours. Stamp duty applies in England and Northern Ireland; Scotland and Wales charge their own transaction taxes. The return and the payment are both due within 14 days of completion, and in practice conveyancers ask for the money on or before completion. On gov.uk's worked example, a £295,000 house carries £4,750 for a UK-resident buyer who will own no other residential property. The same buyer pays nothing at that price if everyone buying is a first-time buyer who will live there as their main residence. A buyer already at the lender's limit cannot fold the tax into the loan, and that is the buyer stretching hardest.

  1. Is a tax payable within 14 days of completion still defensible when buyers are borrowing this close to the ceiling, or is it now a levy on those with the thinnest reserves?
  2. Who does this hit hardest, the first-time buyer who has scraped a deposit together or the mover trading up, and is it fair that the bill falls when they have least in the bank?
  3. Have you had a purchase wobble because a client budgeted the deposit and not the tax? Please give as much colour and detail as possible.

10 responses from the Newspage community

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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
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Stamp duty is choking the UK property market and needs to be revised for the modern era. It can make those looking to move up or down the chain hostages in their own homes, and the lethargy it brings to the market has wider economic implications.
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Mike StatonVerified
Director at Staton Mortgages
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Stamp duty is a Tax that is killing the property market, there is no coincidence that the £300k plus market is dead. The irony stinks on the 14 day rule, especially considering its taking upto 6 months for properties to be registered on land registry. Any payment made to HMRC should be done within a certain timeframe of land registry completion, not sales completion. Everybody is being hit by the stamp duty tax, people are not wanting to move into larger properties due to stamp duty, this leaves a section of the market completely at standstill and filters all the way down to the bottom. The people that do want to sell are finding a lack of buyers is reducing their house price, meaning not only do they have to cough uop stamp duty on their onward purchase, but they also have the double whammy of being hit with another unnecessary tax.
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Stephen PerkinsVerified
Norwich Mortgage Broker and Managing Director at Yellow Brick Mortgages
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Stamp duty is particularly painful for home movers because it consumes cash at exactly the point they often need it most. A larger deposit can reduce the mortgage required and potentially improve the rate available, whereas money spent on stamp duty simply leaves the transaction.

For someone trading up and already borrowing close to their maximum, a tax bill of several thousand pounds can be the difference between having a sensible emergency fund after completion and using virtually every available pound to move. Stamp duty doesn't just raise revenue, it changes behaviour, and for some households it can make staying put look more attractive than moving.
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Paul DenleyVerified
CEO at Oakham Wealth Management
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The worrying part of the BoE data isn't simply that more people are borrowing above 90% LTV. It's what that says about how little financial slack buyers may have left.

Stamp duty is particularly unforgiving because it arrives at exactly the wrong moment. Someone who has stretched to find a 10% deposit can then need significantly more in cash for tax, alongside legal fees, surveys and moving costs.

First-time buyer relief helps, but in London many properties exceed the threshold, so even first-time buyers can face a substantial bill. Homeowners moving up the ladder may face an even greater challenge: they may have equity, but equity isn't spare cash.

Economically, stamp duty is also a tax on mobility, discouraging people from moving for work, upsizing or downsizing. Getting the keys with nothing left in the bank isn't evidence you can afford the house. Life doesn't stop sending bills on completion day.
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Andrew MontlakeVerified
CEO at Coreco
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The irony is that we are finally seeing more lenders help buyers with smaller deposits, yet stamp duty can still take a sizeable bite out of the very cash reserves those buyers need most.

For first-time buyers the relief certainly helps, but movers can be hit particularly hard. They may have equity in their existing home yet still be stretching every sinew to fund the next purchase, alongside legal fees, removals and all the other costs nobody puts on the estate agent’s window.

I have seen plenty of cases where buyers focus understandably on the deposit and monthly mortgage payment, then suddenly realise how much cash is needed elsewhere in the transaction. Stamp duty is not something a mortgage can simply magic away. If we genuinely want a more mobile housing market, transaction taxes should be part of that debate.
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Matt CoulsonVerified
Founder at Heron Financial
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The headline rate isn't really the problem. Stamp duty is a cash bill, due within a fortnight of completion, that a buyer at their lender's limit can't fold into the mortgage. So it lands as a demand for money at the exact moment reserves are thinnest, after the deposit and fees have already gone. First-time buyers are largely shielded by the relief, so the ones who feel it most are movers trading up, and disproportionately in London and the South East, where fairly ordinary homes tip over the thresholds. With more buyers stretching past 90% loan-to-value than at any time since the financial crisis, on the Bank of England's figures, that upfront cash call bites harder than it used to. We do see the wobble: people budget carefully for the deposit and forget the tax, then find themselves thousands short close to completion. A tax you can't finance, due when liquidity is lowest, is badly designed. Spreading how it's paid would do more for a stuck market than most rate tweaks.
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Aaron StruttVerified
Product and Communications Director at Trinity Financial
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Some homebuyers' stamp duty bills are massive and hard to justify. Data from Coventry Building Society highlights there has been a sharp increase in the amount of Stamp Duty paid by homebuyers. The tax bill on an average-priced home has risen from £340 in 2006 to around £4,570 today, representing an increase of 1,260%. The biggest stamp duty bill that one of our clients paid was £848,000 for a £5.5m second home purchase.
The higher tax bills continue to generate substantial revenues for the Treasury. HMRC figures show homebuyers paid £1.1 billion in Stamp Duty during May, when total receipts for the year hit £5.4 billion.
It is hard to believe successive governments haven't introduced an incentive for older people to sell their homes so they can downsize without being hit with a big bill. Such a move would help free up the housing market. There have been repeated calls to make changes to stamp duty taxes, but it seems unlikely much is going to happen because it raises so much cash.
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Tony SanchezVerified
Founder at Bridging Loan Directory
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Through Bridging Loan Directory’s reporting, we see the cash-flow problem most clearly when a home mover’s equity is tied up in a property that has not yet sold. They may have substantial equity on paper but still need to fund stamp duty, legal costs and the onward purchase at completion.

Regulated bridging finance can sometimes allow the purchase to proceed before the existing home is sold, but it does not remove the tax or make an overstretched transaction affordable. It introduces additional interest and fees and depends on a credible sale exit.

The affordability question is therefore not simply whether the buyer can raise the deposit. The whole transaction needs to remain workable once the tax, associated costs and the possibility of the existing property taking longer or selling for less than expected are considered.
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Nouran MoustafaVerified
Practice Principal & IFA at Roxton Wealth
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There is something fundamentally contradictory about encouraging 95% mortgages to help people buy, then hitting some of those same buyers with a tax bill at the exact moment they have the least cash left.

The first-time buyer may escape SDLT at lower purchase prices, but movers and buyers outside the relief can be stretching just as hard. A £4,000 or £5,000 tax bill is not “just another cost” when the deposit has already drained the account.

The clients most exposed are the ones who budget to the mortgage deposit and forget that completion needs a second pot of cash for tax, legal fees, removals and everything else.

My concern is not that tax is due. It is the timing. If the system is comfortable letting someone borrow at 90% or 95% LTV, policymakers should at least ask whether demanding thousands in cash immediately after completion is still sensible.

You cannot call someone mortgage-ready and then financially mug them at the finish line.
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Gosia DawsonVerified
Director at Glade Financial
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Stamp duty can create a real barrier between being able to afford a bigger home and being able to afford to move.
This is particularly noticeable in London and the South East, where a fairly ordinary family home can easily cost £750,000 or more. An existing homeowner buying at £750,000 could face a £27,500 stamp duty bill. That's cash that has to be found on top of the deposit, legal costs and moving expenses – it cannot be absorbed into an already stretched mortgage.
The result is that households can be perfectly capable of servicing the mortgage on a larger property but decide not to move because the upfront cost is too high.
That can discourage families from moving into homes that better suit their needs and can reduce movement through the housing market more generally.
Being able to afford the mortgage is very different from having tens of thousands of pounds in additional cash available just to move home.