The relaxation in mortgage lending rules introduced recently have driven an unusually frenetic summer property sales market, Zoopla has revealed.
Describing the increase in activity as a ‘surge’ the portal says buyer demand is currently up 11 per cent and agreed sales up eight per cent year-on-year, defying the usual summer slowdown.
Zoopla also says it now expects the total number of property sales transactions this year to be 5% ahead of 2024, although prices are likely to remain subdued as many purchasers negotiate hard in a buyers’ market to recoup the extra stamp duty many are paying following the April 1st changes.
But the increased activity has been squarely pinned on the FCA-instigated changes to mortgage lending criteria. Home buyers can now borrow up to 20 per cent more, at the same rate, than they could just three months ago.
This has encouraged more buyers to try and secure a home purchase before the summer and is why buyer demand and sales agreed are higher across all regions and countries of the UK.
Richard Donnell, Executive Director at Zoopla, says: “The housing market is broadly in balance.
“We’re seeing healthy levels of demand and sales, but this isn’t sparking faster price inflation.
“In fact, more homes for sale, particularly across southern England, is re-enforcing a buyer’s market, keeping price rises in check.
“Many more home buyers are paying stamp duty since April and want this extra cost reflected in the price they pay.
“While mortgage rates are holding steady, less stringent affordability testing has boosted buying power and is supporting more sales despite increased uncertainty.”
Industry reaction
Matt Thompson, head of sales at Chestertons
“Compared to summer of last year, we have seen a more active property market which has been driven by an influx of vendors putting their home up for sale,” he says.
“This has given some house hunters a larger selection of properties to choose from which inevitably led to more contracts being exchanged. Some buyers, however, are still pausing their search in the hope that the Bank of England will announce another rate cut in August.”
David Powell, CEO Andrews Property Group
“The market is continuing to find its new normal since the stamp duty incentive was withdrawn at the end of March 2025.,” he says.
“In addition, businesses are coming to terms with the increases in National Living Wage and National Insurances. The market continues to show incredible resilience, however the slow down in house prices is starting to impact consumer confidence illustrated by the increased numbers of properties currently on the market for sale.”
Nathan Emerson, CEO at Propertymark, comments:
“As the year advances, it remains upbeat to witness greater levels of market activity when compared to only twelve months earlier,” he says.
“Both affordability and consumer confidence continue to steadily improve, with more competitive mortgage products gradually finding their way to the market.
““However, higher Stamp Duty costs have impacted house prices in some cases, and this is creating additional regional disparities in terms of house price growth.
“The UK Government may need to reconsider the real world effects that increased Stamp Duty thresholds across England and Northern Ireland have caused, to better invigorate the market across the long-term.”
Tom Bill, head of UK residential research at Knight Frank
“The UK housing market is following a similar pattern to the UK economy this year,” he says.
“Activity was pulled forward into the first quarter and, after a subsequent lull, the recovery has not been as strong as hoped.
“The market hasn’t faced a general election in 2025 but the uncertainty of another autumn Budget means some consumers appear to be already adopting the brace position.
“High levels of supply, in part caused by April’s stamp duty cliff edge, will also keep downwards pressure on prices in the short-term.
“Markets are pricing in two further rate cuts this year, but if inflation comes under control more quickly than expected, that would boost demand by trimming mortgage rates further below 4%.”
