The proportion of first-time homebuyers in the UK choosing properties priced under £300,000 decreased to 64.3 per cent in September, following a peak of 72.0 per cent in May. This change followed adjustments to stamp duty thresholds introduced in April 2025, which reduced the exemption threshold for first-time buyers from £425,000 to £300,000. The market response saw an initial surge in purchases below the new threshold before returning to more typical levels as buyers adjusted.
Barclays’ mortgage data indicates that after the policy shift, completions for homes between £300,000 and £500,000 dropped from 33.1 per cent to 29.2 per cent between April and May but later recovered to 33.6 per cent by September. Only 8 per cent of prospective first-time buyers now view stamp duty as a major barrier to homeownership, down from 11 per cent in April.
For those moving up the property ladder—so-called ‘second-steppers’—the focus has shifted toward long-term stability. Detached and semi-detached houses accounted for 66.1 per cent of non-first-time buyer purchases in September, compared with 63.4 per cent a year earlier.
Spending on mortgage and rental payments rose by 7.3 per cent year-on-year in September, marking the highest increase since February. Confidence in the housing market declined slightly month-on-month, dropping from 29 per cent to 27 per cent.
Despite rising costs, optimism among renters about future homeownership increased: 27 per cent now believe buying a home is achievable within five years (up from 22 per cent in August), while 30 per cent think it is possible within their lifetime. The main perceived barrier has shifted from property prices to saving for a deposit; this concern was cited by 41 per cent of renters.
New measures introduced by regulators in July aimed at making mortgages more accessible have had some impact: only 19 per cent of renters now see their income as a significant obstacle to obtaining a mortgage.
Homeowners moving into their second property reported living an average of nearly seven years (6.8) in their first home. Among these ‘second-steppers,’ one-fifth prioritised finding a ‘forever home.’ Many are also seeking additional space or features such as gardens (35 per cent), parking spaces (31 per cent), or flexibility for changing family circumstances (21 per cent). Investment potential remains important; one-fifth are looking for homes that will retain or increase value.
Competition remains strong among buyers: bidding wars were cited as a challenge by 42 per cent of homeowners; three-quarters reported that chains cause significant stress; and nearly half said cash buyers have an advantage due to faster completion times.
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. 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. 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.”
Data referenced comes from Barclays’ internal mortgage records comparing periods across consecutive years and consumer research conducted by Opinium Research with representative samples across age groups and regions.
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