Almost half of first-time consumers have chosen a 90% loan-to-value (LTV) mortgage for the reason that stamp responsibility modifications got here into impact on 1 April, Twenty7tec reveals.
Before 1 April 2025, first-time consumers paid no stamp responsibility on properties 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 aid was eliminated totally 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 may signify a development the place many rushed to finish purchases earlier than the stamp responsibility modifications took impact.
The newest figures additionally present that the proportion of FTB searches for properties 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 consumers are stretching their deposits resulting from 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 responsibility 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 almost half of first-time consumers at the moment are counting on 90%+ loan-to-value mortgages – an indication of how stretched affordability has develop into.
“While excessive LTV merchandise are nothing new, this degree of reliance factors to the mounting pressures consumers face when attempting to get on the ladder.”
“Yet, regardless of the dip in first-time purchaser exercise, complete normal residential searches – which embrace 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 responsibility change.”
