Mortgage Completions Surge by 50% as UK Buyers Rush to Beat Stamp Duty Deadline
In a significant uptick, mortgage completions in the UK rose by 50% in March, driven by buyers eager to avoid higher stamp duty payments, according to a report by Barclays. The lender revealed that it experienced its busiest month in the UK property market in years, with the highest number of completions since September 2021, when low interest rates fueled a pandemic-era house price surge.
As reported by The Guardian, citing Barclays, the increase in mortgage completions was particularly notable among first-time buyers, who saw a 70% rise in completions compared to the previous month. This surge is attributed to the looming deadline for stamp duty changes, which came into effect in April. The chancellor, Rachel Reeves, announced in October that the temporary stamp duty cuts in England and Northern Ireland would be abolished from April, adding thousands of pounds to the costs of many transactions in this tax year.
However, despite the rush to buy in March, Barclays noted that this has not translated into wider confidence in the housing market. Homeowners are facing heavier costs, and an increasing number of renters are no longer planning to buy. According to Barclays, house prices dipped again in March, and polling by the bank showed that about one in seven prospective first-time buyers felt less able to move into home ownership. Jatin Patel, the head of mortgages, savings and insurance at Barclays, described March as a "blockbuster month for completions." However, he also noted that "for existing homeowners and renters, the shift in sentiment reflects the cautiousness felt across the economy as a whole, as consumers are concerned about rising bills and the prospect of global tariffs impacting their wallets."
The cost of homeownership is becoming increasingly prohibitive, with homeowners who bought in the last year reporting needing an additional £13,530 on average to cover associated expenses, including stamp duty, solicitors’ fees, and surveys. This represents a significant increase from an average reported £9,337 five years ago. Furthermore, Barclays found that just 16% of renters now believe that buying a property is achievable in the next five years.
As The Guardian reported, citing Barclays, the financial pressures of maintaining a home are intensifying at a time when people face a delicate balance between their essential spending and long-term financial goals. Patel added that "housing consumes a significant portion of income, particularly for renters. It’s clear that the financial pressures of maintaining a home are intensifying at a time where people face a delicate balance between their essential spending and long-term financial goals."
In a separate report, Hamptons Letting noted that the cost of borrowing has softened after recent rate cuts, equalizing the cost of mortgage repayments and renting again. According to Hamptons, typical mortgage rates of just over 5% for a first-time buyer with a 10% deposit now mean that average UK monthly mortgage payments are slightly cheaper than the average rental payment – £1,328 compared to £1,356. However, regional differences remain, and it is still cheaper to rent than to buy on a monthly basis in London and across the south.
The data from Barclays and Hamptons Letting suggests that while some buyers are rushing to complete transactions before the stamp duty deadline, the broader housing market is experiencing a more nuanced shift. As reported by The Guardian, citing Barclays, the number of mortgage completions in March represents a significant increase, but it remains to be seen whether this trend will continue in the coming months. With the housing market facing ongoing challenges, it is clear that buyers and renters are exercising caution in the face of rising costs and economic uncertainty.
This article is based on reports from The Guardian: Mortgage completions rose by 50% in March as UK buyers rushed to beat stamp duty deadline.
