Lenders expect mortgage demand to shrink in early 2025, Bank of England finds
Share:
Demand for mortgages from home buyers is expected to fall back in early 2025, according to a survey of banks and building societies. Lenders reported that mortgage demand for house purchases increased in the final months of last year, but was expected to decrease in early 2025.
The Bank of England’s Credit Conditions Survey was carried out between November 18 and December 6 2024. Clearly, the lenders think that the beginning of 2025 will be another period of sluggish activity in the housing market. Lenders were asked to report changes in the three months to the end of November 2024, compared with the previous three months.
They were also asked about expected changes in the three months to the end of February 2025, relative to the three-month period between September and November 2024. Simon Gammon, managing partner, Knight Frank Finance, said: “Clearly, the lenders think that the beginning of 2025 will be another period of sluggish activity in the housing market. As things stand, this is likely to prove true.”.
He highlighted recent bond market volatility, which could have an impact on the cost of some mortgages. Mr Gammon added: “That said, fairly positive inflation data from both the UK and the US this week has calmed bond markets, which suggests we’ll see a swift repricing, rather than weeks of sustained increases in mortgage rates.”.
Some recent housing market reports have pointed to buyers aiming to complete deals before stamp duty discounts become less generous. From April 1 2025, the “nil rate” stamp duty threshold for first-time buyers will decrease from £425,000 currently to £300,000.
