• New UK mortgage lending normalised during April, after previous rush ahead of 01 April UK Stamp Duty changes

• With new mortgage repayments in 2025 already around 55% above historic levels*, a surge in higher-value lending drove a further sharp, but temporary, increase in March

London, August 2025 – UK mortgage data reveals a brief but significant elevation in higher-value lending in March, driven by the rush of activity ahead of the UK Stamp Duty deadline, according to data from credit reference agency Equifax UK’s Affordability Barometer**, which tracks consumer credit trends across major lending categories.

Reflecting this surge in higher-value lending, Equifax UK data shows that average monthly repayments on new agreements briefly peaked, hitting 74% above the January 2022 baseline which marked the beginning of the UK rate increase cycle. However, this figure represents a brief anomaly, with the underlying 2025 trend consistently showing stable repayment levels around 55% above that same baseline.

The 01 April deadline marked a significant scaling back of temporary Stamp Duty relief in England and Northern Ireland. For first-time buyers, the tax-free threshold was revised downwards from £425,000 to £300,000, with the maximum eligible property value also falling from £625,000 to £500,000. For all other buyers, the standard tax-free allowance was halved, reverting from £250,000 to £125,000.

While the mortgage market overall saw robust growth of 49% from February to March
2025, according to Equifax UK analysis the most significant activity was concentrated in
lending bands more likely to be directly impacted by the Stamp Duty changes.

Origination of loans between £200,001 and £400,000, a segment likely to include homebuyers looking to beat the standard tax-free allowance reduction, along with first-time buyers aiming to stay beneath the £425,000 tax-free threshold, grew by 69%. This impact was even more pronounced in the £400,001 to £550,000 range, where volumes surged by 93% as first-time buyers potentially faced a tax increase of up to £11,250.

Following the 01 April deadline, Equifax data shows that new UK mortgage lending activity normalised across May and June, with origination volumes returning to levels consistent with the latter half of 2024. 

Paul Heywood, Chief Data & Analytics Officer at Equifax UK, said: “The first half of 2025 has been a period of adjustment for the UK mortgage market. We’ve seen a clear reaction to policy changes, with the Stamp Duty deadline creating a temporary surge in activity and influencing the average value of new lending and repayments. Despite the data primarily reflecting a shift in the mortgage levels being taken out, rather than a fundamental rise in the cost of borrowing, baseline affordability challenges persist for many consumers and are perhaps compounded for those who sought to accelerate their purchase plans in order to benefit from the temporary stamp duty relief.

“Our data consistently shows that UK consumers are remarkably resilient, finding ways to manage their finances amid ongoing pressures***. However, we must ensure that the right support and tools continue to be available to help everyone navigate their financial journeys effectively and make informed decisions for their long-term financial health.”

To check their credit health, consumers can access their free statutory Equifax credit report online, and visit the Equifax Knowledge Centre for tips and advice on organising finances and managing debt.

Sources:

*Historic levels as of January 2022 baseline marking start of UK rate increasing cycle
**Based on Equifax UK bureau data to end of June 2025
***Equifax 2025 Financial Health Report