The Housing Market's Rollercoaster: A Post-Stamp Duty Reality Check
June 4, 2025, 3:56 am
Location: United Kingdom, England, London
Employees: 1001-5000
Founded date: 1694
The housing market is a wild ride. One moment, it’s soaring; the next, it’s plummeting. Recent data reveals a sharp decline in mortgage lending, sending ripples through the real estate landscape. April was a month of reckoning. The end of the stamp duty holiday marked a significant shift. Borrowers hit the brakes, and the market took a collective breath.
According to the Bank of England, net borrowing of mortgage debt fell by £13.7 billion in April. That’s a staggering drop to -£0.8 billion. It’s a clear signal that the frenzy of the previous months has cooled. Mortgage approvals for house purchases also took a hit, dropping to 60,500 in April from 63,600 in March. This marks the third consecutive month of decline.
The head of residential research at Savills, Lucian Cook, pointed to the rush of first-time buyers in March. They were scrambling to beat the stamp duty deadline. This surge created a temporary spike in activity. But now, the market is feeling the effects of that rush. It’s like a balloon that has popped. The excitement has deflated.
Despite the downturn, house prices are still on the rise. Nationwide reported a 3.5 percent increase year-on-year in May. Prices climbed by 0.5 percent from the previous month. It’s a paradox. While borrowing has dropped, prices continue to climb. This suggests that demand remains, albeit with a more cautious approach.
Estate agents are keeping their cool. They expected a dip in mortgage approvals. The market needed to pause after the stamp duty rush. Jonathan Samuels, CEO of Octane Capital, noted that the reduction was anticipated. The market was due for a reset.
Research from Rightmove revealed a backlog of 575,000 movers eager to complete deals before the tax change. However, about 13 percent of those buyers missed the deadline. This backlog has created a unique situation. Many buyers are still in the wings, waiting for the right moment to jump back in.
Looking ahead, there are signs of optimism. Jason Tebb, president of OnTheMarket, believes that affordability is easing. Four interest rate reductions since August have helped. Lenders are also loosening their criteria. Yet, mortgage rates remain higher than what many have grown accustomed to.
The economic backdrop is complex. Strong wage growth and low unemployment are supporting the housing market. But inflation reached 3.5 percent in April, raising concerns. The Bank of England is becoming increasingly hawkish. Jeremy Leaf, a north London estate agent, doesn’t expect significant changes in the near future. The base rate is unlikely to fall as quickly as many hope.
The market is at a crossroads. Buyers are cautious, yet the desire to own remains strong. The end of the stamp duty holiday has created a new landscape. Prospective buyers are weighing their options carefully. They are looking for stability before making a move.
The government’s role in this landscape cannot be overlooked. The recent performance of Chancellor Rachel Reeves has drawn criticism. Andy Haldane, former Chief Economist at the Bank of England, has labeled her tenure as “disappointing.” He argues that the government is “not even close” to achieving necessary growth.
Haldane points to “rookie errors” that have undermined economic credibility. He believes that the government’s approach has felt penny-pinching. It’s not the bold action needed to ignite growth. The fiscal cart seems to be in front of the growth horse.
There’s still time for a turnaround, according to Haldane. Policy seeds need to be planted now to bear fruit by the next election. The government must correct its course. Mistakes should be acknowledged and addressed.
The mission to drive growth in the UK economy is crucial. It’s not just about GDP; it’s about improving living standards. The focus should be on creating a sense of progress in communities.
As the housing market navigates this tumultuous period, buyers and sellers alike are left to ponder their next steps. The interplay of economic factors, government policy, and consumer sentiment will shape the future.
In conclusion, the housing market is a reflection of broader economic currents. It’s a delicate balance of demand, policy, and consumer confidence. As we move forward, the hope is for a more stable environment. One where buyers can confidently step into the market without fear of sudden drops. The journey ahead may be rocky, but with the right adjustments, the path to recovery is within reach.
According to the Bank of England, net borrowing of mortgage debt fell by £13.7 billion in April. That’s a staggering drop to -£0.8 billion. It’s a clear signal that the frenzy of the previous months has cooled. Mortgage approvals for house purchases also took a hit, dropping to 60,500 in April from 63,600 in March. This marks the third consecutive month of decline.
The head of residential research at Savills, Lucian Cook, pointed to the rush of first-time buyers in March. They were scrambling to beat the stamp duty deadline. This surge created a temporary spike in activity. But now, the market is feeling the effects of that rush. It’s like a balloon that has popped. The excitement has deflated.
Despite the downturn, house prices are still on the rise. Nationwide reported a 3.5 percent increase year-on-year in May. Prices climbed by 0.5 percent from the previous month. It’s a paradox. While borrowing has dropped, prices continue to climb. This suggests that demand remains, albeit with a more cautious approach.
Estate agents are keeping their cool. They expected a dip in mortgage approvals. The market needed to pause after the stamp duty rush. Jonathan Samuels, CEO of Octane Capital, noted that the reduction was anticipated. The market was due for a reset.
Research from Rightmove revealed a backlog of 575,000 movers eager to complete deals before the tax change. However, about 13 percent of those buyers missed the deadline. This backlog has created a unique situation. Many buyers are still in the wings, waiting for the right moment to jump back in.
Looking ahead, there are signs of optimism. Jason Tebb, president of OnTheMarket, believes that affordability is easing. Four interest rate reductions since August have helped. Lenders are also loosening their criteria. Yet, mortgage rates remain higher than what many have grown accustomed to.
The economic backdrop is complex. Strong wage growth and low unemployment are supporting the housing market. But inflation reached 3.5 percent in April, raising concerns. The Bank of England is becoming increasingly hawkish. Jeremy Leaf, a north London estate agent, doesn’t expect significant changes in the near future. The base rate is unlikely to fall as quickly as many hope.
The market is at a crossroads. Buyers are cautious, yet the desire to own remains strong. The end of the stamp duty holiday has created a new landscape. Prospective buyers are weighing their options carefully. They are looking for stability before making a move.
The government’s role in this landscape cannot be overlooked. The recent performance of Chancellor Rachel Reeves has drawn criticism. Andy Haldane, former Chief Economist at the Bank of England, has labeled her tenure as “disappointing.” He argues that the government is “not even close” to achieving necessary growth.
Haldane points to “rookie errors” that have undermined economic credibility. He believes that the government’s approach has felt penny-pinching. It’s not the bold action needed to ignite growth. The fiscal cart seems to be in front of the growth horse.
There’s still time for a turnaround, according to Haldane. Policy seeds need to be planted now to bear fruit by the next election. The government must correct its course. Mistakes should be acknowledged and addressed.
The mission to drive growth in the UK economy is crucial. It’s not just about GDP; it’s about improving living standards. The focus should be on creating a sense of progress in communities.
As the housing market navigates this tumultuous period, buyers and sellers alike are left to ponder their next steps. The interplay of economic factors, government policy, and consumer sentiment will shape the future.
In conclusion, the housing market is a reflection of broader economic currents. It’s a delicate balance of demand, policy, and consumer confidence. As we move forward, the hope is for a more stable environment. One where buyers can confidently step into the market without fear of sudden drops. The journey ahead may be rocky, but with the right adjustments, the path to recovery is within reach.