After a dip in sales in the wake of April’s stamp duty change, UK housing market data reveals a firm uptick in June as buyers quickly adapt to the new conditions.
The housing market has returned to growth after a short-term fall following the stamp duty adjustment in the spring, with seasonally adjusted transactions rising by 13% between May and June.
According to the latest figures from HMRC, there were 93,530 sales completed in the UK last month, compared with 82,510 in May. On a non-seasonally adjusted basis, the result was even higher, with a 17% monthly increase.
It means the housing market is actually returning to more “normal” levels of sales, after a rapid spike in March as buyers rushed to complete purchases before the nil-rate stamp duty threshold was reduced back to the previous level of £125,000, from £250,000, which was then followed by a drop in April.
The stamp duty change, which took effect on 1st April, means that more residential transactions are now liable for the tax, and the bill will also be higher for many purchases. However, strong buyer demand coupled with a shortage of supply is supporting housing market activity, with the latest figures demonstrating that buyers have quickly adapted to the new rates.
Source: www.gov.uk
A steadier housing market
The uplift in housing market transactions is certainly a positive sign for the sector, particularly as there has also been a rise in the number of properties for sale in recent months.
Prices have also been recovering with more stable growth reported across a number of house price indices, which again supports the importance of strong buyer appetite compared with the housing stock available. As confidence returns to the market after a more subdued 2024 due to wider economic factors, more price growth is predicted over the coming years.
While the housing market typically experiences a summer slowdown as buyers take their foot off the gas after a post-Christmas rush, this set of results shows momentum in fact building in the housing market rather than subsiding.
Hamza Behzad, business development director at Finova, notes that this signals “growing buyer confidence”, adding: In May, we saw mortgage approvals shoot up for the first time in 2025, and as the Chancellor moves to slash regulatory red tape – potentially enabling lenders to offer mortgage loans at over four and a half times a buyer’s income – opportunities are opening up.
“While overall market activity hasn’t yet returned to historic highs, the market does appear to be steadying.”
Also noting how the housing market appears to be showing more signs of predictable stability, Nick Leeming, Chairman of Jackson-Stops, says: “While the surge in activity seen in March is unlikely to be repeated, the market remains steady for now, with completions progressing at a healthy pace, though regional variations continue to influence transaction timelines and completions.
“The full market picture is one that points to both an increase in demand as well as supply, with an upward trend of agreed sales likely to be reflected in figures in the coming months as mortgage affordability loosens.”
All eyes on interest rates
Next week, the Monetary Policy Committee (MPC) will meet once again to decide what direction to take the Bank of England base rate, which currently sits at 4.25%.
While there is plenty of pressure on the Bank to cut interest rates, which would be widely welcomed as a catalyst for the housing market as borrowers would benefit from cheaper mortgage rates, it seems analysts are split on the potential outcome.
This is because of a conflict between managing persistent inflation pressures, and taking action to offset the slowing job market – while others prefer a slow and steady pace to rate cuts.
Hamza Behzad adds that if the Bank does push ahead with rate cuts next week, “conditions could become even more favourable for buyers in the months ahead”.
He notes: “As momentum builds, it’s the responsibility of technology partners to ensure lenders platforms can scale with both volume and product complexity – helping to supercharge the next phase of growth in the UK mortgage market.”
Tony Hall, head of business development at Saffron for Intermediaries, believes that the prospect of further interest rate cuts over the course of 2025 will create continued optimism in the UK housing market, creating a “positive outlook heading towards autumn”.
