Almost half of first-time patrons have chosen a 90% loan-to-value (LTV) mortgage since the stamp duty modifications got here into impact on 1 April, Twenty7tec reveals.
Before 1 April 2025, first-time patrons paid no stamp duty on houses as much as £425,000 however since April, the nil-rate threshold fell to £300,000.
Purchases between £300,001 and £500,000 now have a 5% cost, and reduction was eliminated solely above £500,000, down from the earlier £625,000 cap.
Since the modifications, 90%+ LTV borrowing amongst FTBs elevated from 48.84% to 49.49%, with practically half now counting on excessive LTV mortgages to get on the ladder.
Data discovered that searches fell by 6.37%, down from 1,007,752 in Q1 to 943,554 in Q2, which it says might signify a development the place many rushed to finish purchases earlier than the stamp duty modifications took impact.
The newest figures additionally present that the proportion of FTB searches for houses over £300,000 fell from 37.83% in Q1 to 37% post-change.
Overall 90%+ LTV borrowing rose from 21.88% to 22.17%, which the agency says signifies extra patrons are stretching their deposits on account of affordability pressures.
Meanwhile, the proportion of mortgage searches for offers underneath two years rose from 41% in Q1 to 46.5% in Q2.
Twenty7tec director Nathan Reilly says: “This is a standard prevalence when stamp duty guidelines change. Buyers speed up plans to keep away from paying extra tax, and the market then cools as that upfront demand is met.”
“What’s extra regarding is that just about half of first-time patrons at the moment are counting on 90%+ loan-to-value mortgages – an indication of how stretched affordability has turn out to be.
“While excessive LTV merchandise are nothing new, this degree of reliance factors to the mounting pressures patrons face when attempting to get on the ladder.”
“Yet, regardless of the dip in first-time purchaser exercise, whole normal residential searches – which embody movers and remortgagers – rose by 3.95%, from 4,167,357 in Q1 to 4,222,591 in Q2. The general market stays sturdy, pushed by these already on the property ladder, who seem unaffected by the stamp duty change.”
