Back to today’s briefing

Story perspectives

UK Mortgage Lending Dips, Housing Prices Surprisingly Climb 3.5%

6/3/2025

50 9

Summary

UK Mortgage Decline

In April, UK mortgage lending plummeted to -£0.8 billion as buyers hurried to finalize deals before new stamp duty rates kicked in. Mortgage approvals continued their downward trend, hitting 60,500 for the fourth month in a row. Yet, the housing market showed surprising strength, with prices climbing 3.5% year-on-year to an average of £273,427 in May.

Summary

First-Time Buyers Surge

Relaxed mortgage stress testing rules in the UK could spark a surge in first-time buyer transactions by 14% to 24% over the next five years, as reported by Savills. However, this influx may lead to a rise in house prices by 5% to 7.5%, creating a complex dance between accessibility and affordability in the housing market's future.

History

Historical Context

The UK's housing market has faced affordability challenges since the late 1980s, driven by financial deregulation and demographic shifts. Today, rising mortgage completions reflect a rush to buy before new Stamp Duty rates, echoing past crises where affordability dictated buyer behavior and policy responses.

1 of 3

UK Mortgage Decline

In April, UK mortgage lending plummeted to -£0.8 billion as buyers hurried to finalize deals before new stamp duty rates kicked in. Mortgage approvals continued their downward trend, hitting 60,500 for the fourth month in a row. Yet, the housing market showed surprising strength, with prices climbing 3.5% year-on-year to an average of £273,427 in May.

1 / 3