The number of mortgage completions in the UK increased by 50% during a “blockbuster” March as buyers raced to avoid higher stamp duty payments, according to Barclays.
The lender reported its busiest month in the UK property market in years, with the highest number of completions since September 2021, when low interest rates were driving a pandemic-era house price surge.
Completions at the bank were up by half compared with February, and up by 70% among first-time buyers, who potentially face the biggest cost increases under the revised tax regime.
The chancellor, Rachel Reeves, announced in October the end of temporary stamp duty cuts in England and Northern Ireland from April, adding thousands of pounds to the costs of many transactions in this tax year.
However, Barclays said that last month’s rush to buy had not translated into wider confidence in the housing market, with homeowners bearing heavier costs and an increasing number of renters no longer planning to buy.
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.
Homeowners who bought in the last year reported needing an additional £13,530 on average to cover associated expenses including stamp duty, solicitors’ fees, and surveys – up from an average reported £9,337 five years ago.
Barclays, one of the UK’s largest mortgage lenders, also found that just 16% of renters now believed that buying a property was achievable in the next five years.
Jatin Patel, the head of mortgages, savings and insurance at Barclays, said March had been a “blockbuster month for completions”. But he added: “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.
“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.”
The cost of borrowing, which ballooned in the wake of Liz Truss and Kwasi Kwarteng’s disastrous mini-budget in September 2022, has softened after recent rate cuts, equalising the cost of mortgage repayments and renting again, according to a separate report from Hamptons Letting.
It said that typical mortgage rates of just over 5% for a first-time buyer with a 10% deposit now meant that average UK monthly mortgage payments were slightly cheaper than the average rental payment – £1,328 compared to £1,356.
While the long-term trend has been for home ownership costs to be lower than rental, the balance was reversed after the Truss budget.
However, Hamptons said regional differences remained, and it was still cheaper to rent than to buy on a monthly basis, in London and across the south.
