Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

MPs and Industry Call for Urgent Stamp Duty Reform

A cross-party parliamentary committee and several industry figures have called for urgent reform of stamp duty, describing it as a barrier to homebuying and housing mobility. The debate has intensified as new Labour MP Andy Burnham prepares to become prime minister, with stamp duty reform potentially on his agenda.

Stamp duty generated £10.3bn in England and Northern Ireland during 2024/25, according to the report. While this is less than income tax or National Insurance, it remains a significant source of government revenue. However, critics argue that as a tax on moving home, stamp duty discourages people from relocating to properties that better suit their needs.

The Housing, Communities & Local Government Committee issued strong criticism of the current stamp duty system in June. The committee stated that stamp duty reduces the affordability of homeownership, slows the property market, and ultimately damages the economy. MPs called for a comprehensive review of the tax, suggesting options such as lowering rates, updating thresholds to reflect regional prices, reforming reliefs and exemptions, or replacing both stamp duty and council tax with a recurring property tax.

Industry professionals have echoed these concerns. JLM Mortgage Services group director Sebastian Murphy noted that the debate has moved beyond the mortgage industry and into parliament. He highlighted that taxing people each time they move home acts as a brake on housing mobility, affecting not only buyers but also older homeowners who may be discouraged from downsizing due to substantial tax bills.

L&C Mortgages associate director of communications David Hollingworth agreed that stamp duty creates unnecessary friction in the housing market. He pointed out that reviewing council tax and stamp duty together could remove the large lump sum cost that prevents fluidity in the purchase market, though any new annual property tax would need careful design.

Propertymark head of policy and campaigns Timothy Douglas stated that stamp duty has become a tax on moving house rather than on wealth, and reiterated the organisation's position that fundamental reform is needed.

For letting agents and inventory clerks, any changes to stamp duty could have significant implications for transaction volumes and the overall fluidity of the UK property market.