In response to the HMRC Property Transactions Data published today, industry professionals and experts have shared their opinions and reaction.
Karen Noye, mortgage expert at Quilter comments:
“The surge in property transactions in March, as shown in today’s HMRC figures, is a textbook example of how stamp duty changes can artificially distort housing market activity. With thresholds reverting in April, buyers scrambled to complete purchases before facing higher tax bills. It’s no coincidence that residential transactions jumped over 60% compared to February as many were racing against the clock to get deals over the line.
But this morning’s latest Nationwide figures show the true ramifications of the stamp duty changes as it showed a 0.6% fall in property prices in April. These figures reflect a market adjusting to life after the stamp duty change. Given the time it typically takes to complete a property purchase, the vast majority of transactions benefiting from the old rates were agreed earlier in the year. The April price data is the first clean readout of post-change demand and it suggests that once the incentive disappeared prices have slipped.
This is not the first time we’ve seen stamp duty reform warp market trends. During the pandemic, temporary stamp duty holidays triggered a buying frenzy, only for activity to cool significantly once the relief was withdrawn. It’s a clear reminder that these changes, while politically convenient, often create short-term surges followed by sharp slowdowns.
More broadly, stamp duty continues to gum up the system. It discourages downsizing, traps people in homes that no longer suit their needs, and limits fluidity across the housing ladder particularly for older homeowners who might otherwise move. All of this compounds the issue of limited housing supply.
Given that stamp duty is not a particularly large revenue raiser for the Treasury, now would be a good time to take a longer-term view. While a reform is unlikely to be imminent, it’s worth asking whether the current system is fit for purpose. A properly structured review could explore how to reduce the distortions the tax creates, especially when the market is already under strain from high borrowing costs and affordability pressures.”
Ryan McGrath, Director of Second Charge Mortgages at Pepper Money, comments: “Bolstered transaction levels in March can be attributed to the determination of buyers to complete their purchase before the end of the Stamp Duty discount on April 1st.
At the same time house prices have also continued to rise steadily, reaching £268,000 on average in February.* While this pushes buying out of reach for many first-time buyers, for current homeowners building up further equity within their property does provide an opportunity to “improve not move”, adding extensions or changing the space they have rather than moving and putting their current mortgage rate at risk.
The reality for millions of people this year is that they will need to renew their mortgage, and it will be at a much higher interest rate than five years ago. A secured loan is one of the industry’s best kept alternatives, funding home improvements and consolidating debt at the same time, without disrupting a homeowner’s first charge mortgage rate.
Whether you are looking to refurbish the property you live in, reduce monthly outgoings by consolidating debts, or pay an unexpected bill, secured loans are a strong option to consider.”
Target Group’s Mel Spencer said: “Stamp duty deadline aside, with some lenders slashing prices, and others pushing products allowing buyers to borrow on more generous multiples, no wonder transactions are up. Opinion formers have been talking about ‘momentum’. They should be talking about ‘capacity’.
If brokers and lenders and conveyancers don’t look at increasing capacity soon, teams that were built for a quieter, slower property environment will start to run too hot in a race that’s more competitive than envisaged a year or two ago. There are two answers. The first is to start hiring furiously, ramping up in the way the sector always has done in the face of up-cycles. That’s a short-term solution and it’s somewhat antediluvian now.
The second option is to innovate and invest. Scaling via technology is a far better bet over the medium to long term. The mortgage industry should look at how it is digitising, automating, and embracing AI to deal with higher volumes. My concern is that too many lenders – smaller building societies, in particular – are trying to duck the question and avoid making the investment.”
