The Intermediary – March 2025 - Flipbook - Page 50
RESIDENTIAL
Opinion
The impact of
Stamp Duty
on lenders
T
50
he upcoming changes
to Stamp Duty Land
Tax (SDLT) in England
and Northern Ireland,
set to take effect from
April 2025, are poised
to significantly impact the housing
market, affecting both first-time
buyers and existing homeowners.
According to recent research from
Zoopla, these changes will increase
the cost of buying a home for a
majority of purchasers, with four in
five homeowners now expected to pay
SDLT, up from just under half prior to
this deadline. As the Stamp Duty relief
introduced in the 2022 mini-Budget
comes to an end, it’s crucial for lenders
to remain proactive in providing
responsible mortgage options to
mitigate this additional financial
burden on buyers, especially in the
higher loan-to-value (LTV) segments.
across the board. Zoopla estimates that
these changes will raise an additional
£1.1bn in SDLT revenue annually.
The proportion of first-time buyers
required to pay SDLT will double to
42%, hiing London and South East
buyers in the £300,000 and £625,000
range the hardest.
With SDLT adding up to £15,000
in additional costs for some buyers,
affordability will become an even
more pressing issue for borrowers,
particularly for first-time buyers and
those with less equity in their existing
properties. This increase in upfront
expenses could even push many
borrowers into a higher LTV bracket.
For example, a first-time buyer
purchasing a £500,000 property will
see SDLT rise from £3,750 to £10,000,
making it harder to maintain a lower
LTV ratio and potentially leading to
higher borrowing costs.
A surge in costs
Risk and support
From April, the reintroduction of the
2% SDLT rate for purchases between
£125,000 and £250,000 will increase
the financial commitment for buyers
On a positive note, the latest
Moneyfacts UK ‘Mortgage Trends
Treasury Report’ charts an
encouraging trend in the number of
available high LTV mortgage deals,
with 95% LTV products rising to 388
as of March 2025. However, these
deals still represent only 6% of the
market, highlighting the need for
further support from lenders to ensure
sustainable homeownership.
As affordability pressures and
average wages continue to outpace
inflation, with pay packets rising for
both the public and private sector
workers, lenders must find a balance
between responsible lending and
ensuring access to the market for
this key buyer group. Expanding
the availability of competitive high
LTV mortgages, reducing upfront
fees where possible, offering
tailored affordability assessments,
The Intermediary | March 2025
DAVID LOWNDS
is head of sales, marketing
and business development
at Hanley Economic
Building Society
and common-sense underwriting
approaches will all prove key factors
in improving accessibility, supporting
first-time buyers and ensuring
a sustainable housing market
moving forward.
Additionally, lenders can support
buyers through specialised mortgage
products such as Shared Ownership,
Joint Borrower Sole Proprietor, and
intergenerational lending options,
which help supplement deposits and
manage monthly repayments more
effectively. Government schemes
also play a crucial role in making
homeownership more aainable
despite rising upfront costs.
By offering first-time buyers
and second-steppers competitive,
well-structured mortgage products
alongside expert guidance from
intermediaries – where the value
of advice continues to grow – the
industry can help mitigate the impact
of SDLT changes and contribute
to a stable housing market for
all stakeholders. ●
