The period before the stamp duty deadline in April this year saw “a brief but significant elevation” in higher-value lending, according to analysis by Equifax.

According to data from the credit reference agency, average monthly repayments on new agreements briefly peaked, hitting 74% above the January 2022 baseline which marked the beginning of the interest rates increase cycle.

However, Equifax suggested this figure represents a brief anomaly, with the underlying 2025 trend consistently showing stable repayment levels around 55% above that same baseline.

The 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’s 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.

Chief data and analytics officer at Equifax UK, Paul Heywood, 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.

Following the stamp duty deadline, Equifax data has also shown that new mortgage lending activity normalised across May and June, with origination volumes returning to levels consistent with the latter half of 2024.

Heywood added: “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.”

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