The value of gross mortgage advances decreased by 24.2 per cent during the second quarter of 2025 as stamp duty changes came into effect, data from the Financial Conduct Authority has revealed.
The FCA’s mortgage lending statistics for Q2 2025, found that the value of mortgage advances fell to £58.8bn, when compared to £77.6bn the previous quarter.
This is the lowest level since Q1 2024 and represents a fall of 2.4 per cent on a yearly basis.
Quilter mortgage expert, Karen Noye, said: “The latest mortgage lending statistics from the FCA show the market slumped considerably following the changes to stamp duty which came into effect in April.
“The start of the year had seen a marked lift in lending activity as people rushed purchases before the shift in the tax rules saw their bills rise substantially overnight.
“However, with interest rates still high and stamp duty costs inflated, it came as no real surprise that there was such a downward shift in the months that followed.”
Despite this finding, the authority also revealed more positive results, with the value of new mortgage commitments increasing by 14.6 per cent from the previous quarter to £78.2bn.
This represents the highest level of new mortgage commitments since the third quarter of 2022 and is an increase of 16.8 per cent on a yearly basis.
“While the market has been stalling somewhat during this period of adjustment, we are beginning to see some momentum pick back up,” Noye explained.
“The value of new mortgage commitments, which indicate future lending agreements, rose by 14.6 per cent from the previous quarter to £78.2bn.
“This reflects increased risk-taking as lenders seek to attract buyers with smaller deposits.
“While this may once have been cause for concern, the strict lending criteria and stress testing rules in place today mean even in the volatile interest rate environments, customers should still be able to afford their mortgages.”
Mortgage charter
Additionally, the FCA published insight provided by firms who have signed up to the government’s mortgage charter in a separate publication.
In the latest 3-month period, spanning from May to July 2025, the FCA revealed that around 489,000 mortgages locked into a new deal up to six months ahead of maturity.
This compares to around 341,000 mortgages in the previous three month period from February to April 2025.
In addition, the number of mortgages that, after locking into a new deal up to six months before maturity, subsequently locked into an alternative deal, increased from around 52,000 between February and April, to 104,000 between May and July.
Additionally, the data revealed that, between July 2023 and July 2025, the monthly payments on around 278,000 mortgages were reduced as people switched to temporary paying interest-only or extended their mortgage term.
This is around 3.1 per cent of regulated mortgage contracts.
tom.dunstan@ft.com
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