First-time buyer purchases up 59% in race to complete ahead of stamp duty deadline
Missing stamp duty deadline to cost homebuyers £6,512 as mortgage demand surges in race for completion
Spending on mortgages and rent grew by 7.7.% in February, up 5.7 percentage points from January, according to the latest Barclays Property Insights report.
The report has also discovered that homebuyers could be faced with additional costs of £6,512 if purchases aren’t completed before the Stamp Duty deadline. First-time buyer purchases are up 59%, comprising 36% of mortgage completions since the Autumn Budget announcement.
Despite this, consumer confidence in the UK housing market is at its highest level (30%) since October 2024.
Key outputs from the Barclays Property Insights report show that:
- A fifth (21%) of prospective movers will look to buy a smaller property to mitigate costs if their sale isn’t completed before 1st April
- Demand for homes above the current stamp duty threshold of £425,000 has steadily declined each month, with completions in this bracket dropping from 21 per cent in October 2024 to 16 per cent in February 2025
- Rental costs have increased for nearly seven in 10 (69%), with Gen Z hit hardest with an average annual increase of £1,616
- Consumer concerns about inflation (64%) and interest rates (88%) have reached the highest level since September 2023
- Average monthly mortgage completions have increased 26 per cent following stamp duty changes announced in the Autumn Budget
- First-time buyer purchases are up 59 per cent, comprising 36 per cent of completions
- One in eight buyers say they will pull out if unable to complete before the 1st April deadline
- ‘Rentflation’ has cost Gen Zs an extra £1,616 on average in the past year
- Barclays Property Insights combines research with data from across the Bank to give an in-depth perspective on UK housing trends
Data from Barclays Property Insights shows that rent and mortgage spending increased 7.7 per cent year-on-year in February, as more homeowners moved from lower fixed-rate mortgages onto higher rates. The increase in costs and upcoming changes to Stamp Duty Land Tax are causing concern for buyers, although renters are still taking steps to accelerate their homeownership goals.
Confidence in the UK housing market has grown to 30 per cent, its highest level since October 2024, up from 24 per cent in January, despite the upcoming tax changes in England and Northern Ireland. However, some worries persist as consumers reported the highest level of concern around inflation (88 per cent) and interest rates (64 per cent) since September 2023.
Race against stamp duty deadline drives demand
Homebuyers in England and Northern Ireland on track to miss the looming deadline expect to fork out an extra £6,512 on average for their purchase, resulting in a surge in demand for mortgages.
Barclays mortgage data shows that average monthly completions have increased 26 per cent in the wake of the Autumn Budget when the changes were announced1. This is largely driven by a 59 per cent surge in first-time buyer purchases, whose share of completions has risen seven percentage points, from 29 per cent to 36 per cent.
Changes to the stamp duty bands are also limiting the choice of property stock available to first timers. Barclays data shows that demand for homes above the current stamp duty threshold of £425,000 has steadily declined each month, with completions in this bracket dropping from 21 per cent in October 2024 to 16 per cent in February 2025.
Among those with a purchase in progress, nearly one in eight (12 per cent) say they will pull out if they do not complete before the end of March. Meanwhile, a fifth (21 per cent) of prospective movers say that they will now look to buy a smaller property to mitigate costs, with 18 per cent changing the location of their search to a more affordable area.
Rentflation keeps housing ladder a step out of reach for Gen Z
Despite reports that ‘rentflation’ – the increase of rental costs – has slowed across the UK2, the nation’s renters continue to feel the pinch. Nearly six in 10 (58 per cent) say their rent has increased in the last 12 months, and three in ten (29 per cent) in the last six months. This is most acute for Gen Z (18–27-year-olds), with over a third (36 per cent) reporting a rise in the last six months.
Rentflation has left average UK renter facing increases £105.90 out of pocket each month, with one in five (20 per cent) citing rental rising costs as one of the biggest barriers to owning a home. The impact is steeper among younger adults, with Gen Z reporting an average increase of £134.70 per month, the equivalent of £1,616 a year.
Almost six in 10 Gen Z renters (57 per cent) are currently saving for a deposit to buy a home, while four in 10 (40 per cent) believe homeownership is within reach in the next five years, compared to 23 per cent across all ages. However, rentflation’s squeeze on savings means that nearly two-thirds of Gen Z renters (64 per cent) say that they would find it impossible to buy a home without an inheritance or a loan from a family member.
Meanwhile, Barclays’ proprietary data revealed that the average age of a first-time buyer in the UK rose to nearly 34 in 2024, up from 32 only two years earlier, as homeownership becomes more challenging.
Sian McIntyre, Managing Director of Mortgages and Savings at Barclays, said: “Our latest data indicates that prospective buyers are adapting their behaviour to get ahead of some of the volatility in the market. Encouragingly, amidst rising house prices, uncertainty around interest rates, and the upcoming changes to stamp duty, consumer confidence in the housing market is staying the course.
“Renters are still determined to overcome barriers to homeownership, with this resilience testament to the value individuals place on investing in property. We have several products like Barclays Springboard Mortgage and Mortgage Boost which can help first timers make that step onto the ladder.”
Will Hobbs, Managing Director at Barclays Private Bank and Wealth Management, said: “The UK’s housing market continues to unevenly find its feet after the turbulence of the pandemic. Much of the step change in interest rates of the past few years has now been digested by households and the geography of demand has settled a little further.
“Even though the cyclical picture for the UK remains a little sluggish on the evidence of incoming data, we continue to see the outlook as better set than feared.”
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