A stamp duty “hangover” has struck London, with demand from home buyers falling back, according to an index.

Zoopla estimates that around eight in 10 first-time buyers in London will pay stamp duty from April 2025, compared with less than half under current thresholds.

From April, the “nil-rate” stamp duty threshold for first-time buyers is set to reduce from £425,000 to £300,000, among other changes.

Stamp duty applies in England and Northern Ireland, with locations where house prices are relatively high being particularly likely to be affected by the changes.

In London, buyer demand is lower than a year ago, bucking the trend seen elsewhere in the UK, according to the report.

It said the London housing market is “suffering something of a hangover in the wake of the rush to beat the April 1 stamp duty deadline.

“This has created a lull in market activity, with demand 3% lower over the last year. The impact is more pronounced amongst first-time buyers, hitting price rises in the capital.”

Zoopla suggested that many first-time buyers brought forward decisions to buy homes late last year to avoid paying higher stamp duty from April 1, creating a lull in first-time buyer demand as the deadline approaches.

Overall, the annual rate of UK house price growth slowed to 1.8% in February, down from 1.9% in January. The average price of a UK home is £267,500, Zoopla said.

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The website also said that some hotspots popular for second homes, such as Truro in Cornwall and Torquay in Devon, have seen a dip in house prices.

At the other end of the spectrum, house prices are rising particularly quickly in locations such as Motherwell and Kirkcaldy in Scotland and in Wigan, Blackburn, Lancaster and Bradford in northern England, the website reported.

In all these areas, average house prices are between £130,000 and £220,000, which is lower than the national average, the report said.

The report said: “In northern England, the Midlands and Scotland, buyer demand is 10% (plus) higher than a year ago, while the supply of homes for sale has grown more slowly. This is supporting above-average house price inflation.”

Richard Donnell, executive director at Zoopla, said: “House price growth is set to moderate further as supply grows and the extra costs of stamp duty in England feed through into house prices.

“A slowing in house price growth is not a major concern, although the market needs some growth in prices to encourage sellers to come to market and buyers to make realistic offers on homes for sale.

“There is plenty of demand for homes but also lots of choice.

“Households looking to sell their home in 2025 need to be careful when setting their asking prices if they are to attract sufficient demand to agree a sale.

“It’s important to seek the advice of local estate agents to inform the most suitable pricing strategy for every home.”