UK housing market under pressure as it faces summer lull
The latest Bank of England Money and Credit figures illustrate the pressures the housing market continues to face, with the aftereffects of the stamp duty threshold changes, alongside ongoing affordability issues and the yearly summer lull all weighing heavily.
“Net borrowing had fallen off a cliff in April, the first month post stamp duty changes, but this has been steadily increasing since. Net borrowing increased by £3.1 billion to £5.3 billion in June,” said Ian Futcher (Financial planner at Quilter).
This is up from £2.2 billion of net borrowing in May, but is still a far cry from the £13.0 billion seen in March, he said.
“However, net mortgage approvals for house purchases, which is indicative of future borrowing, increased only marginally. The figure rose by just 900 to 64,200 in June and suggests prospective buyers have taken their foot off the pedal ahead of the summer months.
“Remortgages were similarly light, with approvals up just 200 to 41,800 in June – though this small increase tipped it over to the highest number of approvals for remortgaging since October 2022.”
Slowdown expected
With the summer holidays now in full swing, we could see a slowdown as trips abroad take precedence over moving home, said Futcher.
“The market is used to a dip in momentum during this time of the year but having already had a fairly slow start to 2025, we could see this lull have a knock-on effect on house prices.
“However, while we may not see activity pick up until nearer the autumn, by that time the stamp duty changes will have sunk in. Buyers will have no choice but to adjust to the new norm if they wish to move home, and we could see the market pick up some pace as a result.”
Meanwhile, the rise in consumer credit borrowing to £1.4 billion, from £0.9 billion in the previous month, highlights the broader strain on household finances, said Futcher.
“Credit card debt is growing at a pace, up to £0.7 billion in June from £0.2 billion the month prior, and with rates on these products still high, this raises longer-term concerns around financial resilience,” he said.
