The number of mortgages approved jumped in June, signalling the market is recovering from the impact of the stamp duty change in April.
Borrowing figures also rose sharply last month, providing further evidence things are returning to normal following the tax hike.
On 1 April stamp duty rates increased meaning many movers were faced with paying more tax and some first-time buyers, who were previously exempt from the tax, had to pay.
In the run up to April the market saw a frenzy of buyers rushing to purchase their home before the stamp duty deadline. This was followed by a lull in April and May.
But today’s figures from the Bank of England, showing net mortgage approvals had increased by 900 in June to 64,200 and the sums people were borrowing had shot up by £3.1billion to £5.3billion, has been seen as an encouraging sign.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said the data suggested the housing market was recovering more quickly than expected following the end of the stamp duty tax break.
“Even heightened geopolitical tensions in the Middle East in June failed to unsettle buyer confidence,” she said.
“It appears slower house price growth in June, as the stamp duty changes, geopolitical uncertainty and a lacklustre economic outlook fed through to the market, failed to deter committed buyers from taking action and plunging into the market.”
She added: “With geopolitical concerns easing since June, mortgage activity is expected to pick up further in the months ahead, particularly if the anticipated base rate cut in August materialises and house prices weaken.”
However, not everyone thought the figures were positive with some experts saying the housing and mortgage market are still very much in recovery mode, especially with affordability such a big problem for new buyers.
Ian Futcher, financial planner at Quilter, said whilst borrowing figures were indeed higher, they were still a ‘far cry from the £13billion seen in March’.
He added: “Net mortgage approvals for house purchases, which is indicative of future borrowing, increased only marginally. The figure rose by just 900 to 64,200 in June and suggests prospective buyers have taken their foot off the pedal ahead of the summer months.
“Remortgages were similarly light, with approvals up just 200 to 41,800 in June – though this small increase tipped it over to the highest number of approvals for remortgaging since October 2022.
“With the summer holidays now in full swing, we could see a slowdown as trips abroad take precedence over moving home. The market is used to a dip in momentum during this time of the year but having already had a fairly slow start to 2025, we could see this lull have a knock-on effect on house prices.
“However, while we may not see activity pick up until nearer the autumn, by that time the stamp duty changes will have sunk in. Buyers will have no choice but to adjust to the new norm if they wish to move home, and we could see the market pick up some pace as a result.”
