"While these are signs of growing financial resilience, the challenges many households face, particularly around affordability, remain"
- Eric Leenders - UK Finance
Mortgage lending spiked in early 2025 as buyers rushed to complete transactions before new Stamp Duty rules came into effect, according to the latest Household Finance Review from UK Finance.
First-time buyers and homemovers drove the increase, with completions jumping in the weeks leading up to the April change. In total, first-time buyer completions rose by 62% year-on-year in Q1, while homemover completions were up 74%.
Q1 completion figures:
First-time buyers:
Q1 2024: 66,250
Q1 2025: 107,000
Change: +62%
Homemovers:
Q1 2024: 54,640
Q1 2025: 94,450
Change: +74%
According to the data, March was the peak month, reflecting the urgency ahead of the tax changes. Compared with the same month in 2024, completions in March 2025 increased by 113% for first-time buyers and 140% for homemovers.
March completion figures:
First-time buyers:
March 2024: 24,070
March 2025: 51,180
Change: +113%
Homemovers:
March 2024: 19,720
March 2025: 47,360
Change: +140%
Preliminary figures for April show a slowdown in activity as the Stamp Duty rush came to an end.
Affordability remains tight
Even with the surge in completions, affordability pressures persist. More buyers are extending their mortgage terms to reduce monthly repayments. The average mortgage term for a first-time buyer reached 31 years in March 2025, up from 28 years a decade earlier. Much of this increase stems from a growing number of borrowers opting for 40-year terms, typically the longest term available from most lenders.
Although interest rates have declined, affordability has not eased significantly. Rising house prices continue to offset lower borrowing costs, keeping mortgage payments high relative to income.
Remortgaging trends shift
There has been a small but notable movement away from internal product transfers toward external remortgaging. Total refinancing fell by 13% in Q1, largely due to a quieter start to the year in terms of fixed-rate deal expiries. Product transfers still dominated the market, accounting for eight in ten refinances, although that figure was down from 83% in Q1 2024.
Looking ahead, around 1.6 million fixed-rate mortgage deals are expected to expire in 2025.
Household savings rise
Household savings increased by 3% in Q1 compared with March 2024. The trend was driven by a rise in precautionary saving, likely reflecting ongoing economic concerns. Deposits into notice accounts rose by 10% over the quarter, while cash ISAs grew by 11%.
“We saw a significant rise in mortgage activity in the first quarter as households moved quickly to take advantage of lower Stamp Duty rates," explained Eric Leenders, managing director of personal finance at UK Finance.
"Savings also continue to build, with consumers increasingly favouring notice accounts and ISAs. As discussions around cash ISA reforms continue, it remains clear that many savers continue to favour them as a reliable means to build and protect their savings,"
He added, “While these are signs of growing financial resilience, the challenges many households face, particularly around affordability, remain. Anyone worried about their mortgage or financial situation should speak to their lender early to explore the support available.”
Toby Leek, NAEA Propertymark President, said, “The increase in Stamp Duty thresholds sparked a flurry of mortgage lending in the first quarter of 2025 due to people rushing to avoid paying higher rates of Stamp Duty across England and Northern Ireland and before thresholds changed at the start of April.
“While this has a positive effect on the mortgage market within the first quarter of the year, it was always inevitable there would be a post threshold slow down as an aftereffect. As we head into the summer months, it remains a case of all eyes on the Bank of England regarding the directions of travel on the base rate over the coming months and how this might translate into lenders bringing potentially more competitive mortgage products to the market.”
