Barclays’ latest mortgage data showed more first-time buyers (FTBs) were looking for homes under £300,000 after the April Stamp Duty changes, but this demand soon settled back to normal levels as buyers adjusted.
In May, 72.0% of FTB completions were for homes under £300,000, up from 60.6% in April.
By September, this had dropped back to 64.3%.
Across all buyers, completions for homes between £300,000 and £500,000 fell from 33.1% in April to 29.2% in May, but recovered to 33.6% in September.
Fewer FTBs now see Stamp Duty as a major barrier, with just 8% citing it in September compared to 11% in April.
Only 4% of homeowners said they were rushing to sell in case of further tax changes.
Mortgage and rental payments increased by 7.3% year-on-year in September, the biggest jump since February.
Despite the Bank of England holding the base rate at 4%, confidence in the housing market dropped slightly to 27% from 29% month-on-month.
However, 27% of renters believed in September that homeownership is achievable within five years, up from 22% in August.
The top barrier for renters was the cost of a deposit at 41%, overtaking property prices at 39%.
More renters were saving for a deposit, rising by six percentage points to 30%.
Getting a mortgage on current income was the third biggest barrier for renters at 19%.
Second-steppers, or those moving up from their first home, stayed in their first property for 6.8 years on average.
For the next move, 19% said they looked for a ‘forever home’.
Detached and semi-detached houses made up 66.1% of non-FTB purchases in September, up from 63.4% in September 2024.
Buyers were after more space, with 35% wanting a garden, 31% a parking space or driveway and 21% flexibility for changing family circumstances.
Around 21% of buyers were looking for a property that would better hold or increase its value.
A third of homeowners thought the UK was a buyers’ market.
Four in 10 said bidding wars made it harder to secure a home, while 74% reported chains as a major source of stress.
Half agreed cash buyers had an unfair advantage because they can complete sales more quickly.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “Our latest data shows that policy shifts like stamp duty adjustments can create short-term volatility, but buyers adapt to market circumstances.
“As the Autumn Budget approaches, keeping a long-term view is key, considering the broader outlook for the housing market instead of responding only to the immediate aftermath of any policy changes.
“Though it’s encouraging that renters feel more positive about their homeownership prospects, costs continue to increase, and ‘second-steppers’ report feeling pressure on both sides of buying and selling.”
Patel added: “It’s a reminder that there is more work to be done to smooth out the process and increase awareness of available support, if we are to create a more dynamic housing market for everyone.”
Julien Lafargue, chief market strategist at Barclays, said: “Despite the current uncertainty both domestically and globally, the UK real estate market – just like the broader UK economy – remains resilient.
“However, recent indicators point to a loss of momentum, with signs of a softening labour market and stagnant economic activity during the third quarter.
“Crucially, these developments may prompt the Bank of England to consider lowering interest rates sooner than markets currently anticipate.”
Lafargue added: “A more accommodative monetary stance could provide timely support to the housing sector, particularly as greater policy clarity is expected following the release of the Autumn Budget.”
