The £500,000 stamp duty blackspot
709 sales are missing from the £5,000 just above £500,000 — 39% fewer than the market either side of it predicts.
One tax threshold bends where homes get priced — and when the threshold moved, the hole moved with it.
Arm's-length residential sales (category A), 1 April 2025 to 31 March 2026. 635,379 transactions in the window.
The evidence
For each price point: sales in the £5,000 above it, divided by sales in the £5,000 below it. A ratio near 1.00 means sales pass through normally. The relief ceiling moved from £625,000 to £500,000 on 2025-04-01 — so if the effect is tax and not psychology, the hole should move with it while the controls stay put.
| Price point | Until 31 Mar 2025 | From 1 Apr 2025 | p | |
|---|---|---|---|---|
| £500,000 First-time-buyer relief ceiling from 1 Apr 2025 (notch) |
0.62 | 0.46 | 5.7e-07 | *** |
| £625,000 First-time-buyer relief ceiling until 31 Mar 2025 (notch) |
0.73 | 0.99 | 3.6e-05 | *** |
| £450,000 No tax threshold under either regime (control) |
0.71 | 0.73 | 4.9e-01 | ns |
| £550,000 No tax threshold under either regime (control) |
0.78 | 0.79 | 9.0e-01 | ns |
| £600,000 No tax threshold under either regime (control) |
0.63 | 0.61 | 6.8e-01 | ns |
| £750,000 No tax threshold under either regime (control) |
0.81 | 0.83 | 8.0e-01 | ns |
Pearson chi-square on the 2×2 table (period × above/below), 1 degree of freedom. *** p<0.001, ** p<0.01, * p<0.05, ns = not significant. Both thresholds that moved are significant and move in opposite directions; all four controls are flat and not significant.
How we calculated this
For each price point we count arm's-length residential sales (HM Land Registry category A) in the £5,000 below it and the £5,000 above it, and divide the second by the first. A ratio near 1 means sales pass through the price point normally; a low ratio means buyers and sellers are avoiding the band just above it.
Round numbers attract sales on their own, so a low ratio at a round number proves nothing by itself — we measured £1,000,000 and found a bigger hole there than at £500,000, with no tax threshold involved. The test that works is that the first-time-buyer relief ceiling moved from £625,000 to £500,000 on 1 April 2025. Round-number psychology is identical either side of that date; only the tax changed. So we compare each price point before and after the change, using four round-number price points with no tax meaning as controls, and test each 2×2 table (period × above/below) with a Pearson chi-square on 1 degree of freedom.
The measure is diluted on purpose: it counts all buyers, not just first-time buyers, because Price Paid Data does not identify them. The true effect on the buyers who actually face the notch is larger than the number shown here.
What this can't tell you
The pre-change window is short and unusual — it sits inside the rush to beat the 1 April 2025 stamp duty deadline, when completions ran at roughly double the normal rate. That rush is why we lean on the control price points: if it were distorting the shape of the price distribution, the controls would have moved too, and they did not.
Source and licence
HM Land Registry Price Paid Data — arm's-length residential sales (category A), 1 April 2025 to 31 March 2026 (635,379 transactions), analysed by Offrly.
Contains HM Land Registry data © Crown copyright and database right. This data is licensed under the Open Government Licence v3.0.
Free to reproduce with attribution to Offrly and HM Land Registry. The data behind this page · Open Government Licence v3.0
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