Almost half of first-time buyers have selected a 90% loan-to-value (LTV) mortgage since the stamp duty changes came into effect on 1 April, Twenty7tec reveals.
Before 1 April 2025, first-time buyers paid no stamp duty on homes up to £425,000 but since April, the nil-rate threshold fell to £300,000.
Purchases between £300,001 and £500,000 now have a 5% charge, and relief was removed entirely above £500,000, down from the previous £625,000 cap.
Since the changes, 90%+ LTV borrowing among FTBs increased from 48.84% to 49.49%, with nearly half now relying on high LTV mortgages to get on the ladder.
Data found that searches fell by 6.37%, down from 1,007,752 in Q1 to 943,554 in Q2, which it says could signify a trend where many rushed to complete purchases before the stamp duty changes took effect.
The latest figures also show that the proportion of FTB searches for homes over £300,000 fell from 37.83% in Q1 to 37% post-change.
Overall 90%+ LTV borrowing rose from 21.88% to 22.17%, which the firm says indicates more buyers are stretching their deposits due to affordability pressures.
Meanwhile, the proportion of mortgage searches for deals under two years rose from 41% in Q1 to 46.5% in Q2.
Twenty7tec director Nathan Reilly says: “This is a common occurrence when stamp duty rules change. Buyers accelerate plans to avoid paying more tax, and the market then cools as that upfront demand is met.”
“What’s more concerning is that nearly half of first-time buyers are now relying on 90%+ loan-to-value mortgages – a sign of how stretched affordability has become.
“While high LTV products are nothing new, this level of reliance points to the mounting pressures buyers face when trying to get on the ladder.”
“Yet, despite the dip in first-time buyer activity, total standard residential searches – which include movers and remortgagers – rose by 3.95%, from 4,167,357 in Q1 to 4,222,591 in Q2. The overall market remains strong, driven by those already on the property ladder, who appear unaffected by the stamp duty change.”