As the dust settles on the latest stamp duty changes, mortgage brokers must now navigate a shifting housing market landscape. The first day of the new tax regime has coincided with a slowdown in property price growth, as evidenced by the latest Nationwide house price index data released this morning.
Nationwide reported that while annual growth held steady at 3.9% in March, there was no increase on a monthly basis—a stark contrast to the 0.4% rise recorded in February.
Much of this stalling can be attributed to the impact of stamp duty changes, which have left many would-be movers facing significantly higher tax bills. In her comment below, Karen Noye, mortgage expert at Quilter, highlights how these additional costs have deterred buyers, particularly first-time purchasers already grappling with affordability challenges. Mortgage approvals and borrowing figures from the Bank of England reinforce this narrative, showing a notable decline as buyers hesitate in the face of growing financial burdens.
However, the market’s response to these changes remains uncertain. Some experts, such as Jonathan Handford of Fine & Country whose analysis is below, point to the potential for further price dips in the coming months as demand temporarily wanes. Others, including Nathan Emerson of Propertymark, remain optimistic about continued momentum heading into the traditionally busy summer season, particularly as mortgage rates become more competitive.
For mortgage brokers, the coming months will require strategic thinking and proactive guidance for clients. The need for alternative solutions—such as longer-term fixed-rate mortgages, as noted by Mark Eaton of April Mortgages below—may become increasingly important for buyers struggling to make their homeownership ambitions a reality. As affordability concerns persist, brokers have an essential role in helping clients navigate these complexities and secure the best possible mortgage deals in today’s challenging market conditions.
Sharing their reaction to these latest Nationwide HPI data, mortgage and property experts have commented as follows:
Karen Noye, mortgage expert at Quilter said: “On the first day of the new stamp duty rules, the Nationwide house price index has painted a picture of a stalling property market. Annual price growth came in at 3.9% in March, matching February’s figure, but there was no growth at all on a monthly basis, down from 0.4% growth in the month prior.
“Much of this slowdown can be attributed to the stamp duty changes which come into play today. Those who were hoping to move but did not get a sale across the line in time will now face hefty tax bills, often adding several thousand pounds to the cost of a move. With this in mind, it is no surprise that house prices stalled in March as many will have put their plans on hold knowing the tax bill that would have awaited them.
“First time buyers will feel the shock of the new stamp duty thresholds even more keenly, and their hard saved deposit will now need to be topped up to account for the additional costs. These prospective buyers already face significant affordability hurdles, so this end of the market could well see limited movement in the coming months while they grow accustomed to the even higher costs of homeownership.
“Figures out from the Bank of England just yesterday also highlighted the dampening effects of these changes. Net mortgage borrowing decreased by £0.9 billion to £3.3 billion in February, owed to people putting home moves on hold as they’d missed the opportunity to get a sale pushed through in time. Approvals for house purchases stayed flat, decreasing by just 600 to 65,500 in February. Both figures are likely to continue to fall in the next few months.
“There is no doubt that the housing market is already rather sluggish, and the stamp duty changes will do little to help matters. Prospective buyers may well hold out in hopes that interest rate cuts will come through, but the Bank of England is unlikely to make any significant changes in the near term.”
Mark Eaton, Chief Operating Officer at modern longer-term fixed rate lender April Mortgages, comments: “House prices plateaued in March, which is to be expected following successive months of growth as buyers scramble to the finish line on this year’s tax changes.
“The stamp duty deadline has now passed and it remains to be seen whether or not industry analysts were accurate in assessing how important this was in boosting the number of transactions.
“We may see a downward readjustment in the market, but affordability is still a sticking point as we move into the busier summer months. Inflation may be falling, but not at the rate we need to see any immediate improvement.
“To rub salt into the wounds for first-time buyers, we are unlikely to see any new incentives before the next budget to help get people on the property ladder.
“The mortgage industry needs to step in and raise awareness of longer-term modern fixed rates which provide access to larger loan amounts, which are especially useful for people struggling to save a deposit.
Nathan Emerson, CEO of Propertymark, comments: “The housing market has witnessed an extremely encouraging start to the year with sustained house price growth year on year. Although we now sit at the very start of the amended Stamp Duty thresholds for people across England and Northen Ireland, we remain optimistic to see strong market momentum across the entire UK, as we head towards the traditionally busy summer months.
“Although we are still seeing fluctuations within the rate of inflation, and a much needed cautious approach from the Bank of England regarding base rates, we are starting to see enormously welcome sub 4 per cent mortgage deals offered by some lenders. As we hopefully witness potentially further base rate cuts across the year, it would be encouraging to see this translate into yet more competitive mortgage products being widely offered.”
Jonathan Handford, Managing Director at national estate agent group Fine & Country, said:
“House prices remained stable in March, extending the trend seen over recent months.
“It’s no surprise that this stability persists, as homebuyers rushed to complete purchases before the April tax changes took effect, particularly the reduction in the stamp duty threshold.
“However, with this key deadline now passed, attention turns to whether the market can sustain its current momentum or if we will see a price dip in the following months.
“Despite inflation unexpectedly falling to 2.8% in February, and the Bank of England’s decision to lower interest rates to 4.5%, affordability concerns remain a barrier for many prospective buyers. With inflation still above the Government’s 2% target, the base rate remained unchanged in March — dashing hopes for a further cut.
“The latest figures from the Bank of England show that mortgage approvals for house purchases declined again in February, while consumer credit borrowing growth also slowed. This suggests that even with improved borrowing conditions, households are still exercising caution in the face of broader economic pressures.
“As the market readjusts, buyer activity may ease in the coming months, potentially leading to a cooling of house price growth. However, seasonal trends could provide some support, as spring typically sees an uptick in homebuying activity.”
Matt Thompson, head of sales at Chestertons, says: “Despite the rush of first-time buyers entering the market to beat the stamp duty deadline having slowed down, sellers anticipate a busy spring market. We have seen an increasing number of homeowners listing their property for sale in March which is currently creating a greater choice for house hunters. Still, with London having one of the most competitive property markets in the world, buyers are required to act fast and start their search as early as possible.”
