Activity stalls as buyers and advisers await clarity on tax and rates
The current pause in the UK mortgage market is leaving both brokers and their clients in a state of uncertainty, as they await the Labour government’s November Budget.
With speculation swirling around possible changes to stamp duty, the introduction of a mansion tax, and the direction of interest rates, many buyers have chosen to hold off on property transactions, while brokers find themselves managing client anxieties and a slowdown in new purchase business.
“The mood is what we’d like to call subdued in terms of the uncertainty around interest rates,” said Akhil Mair (pictured top left), managing director at Our Mortgage Broker. “Very much optimistic with the outlook for the UK market, but with one eye also on the wider economic factors that play a pivotal part as well. That’s the broker sentiment, I would say.”
Landmark Information Group’s Q3 2025 Residential Property Trends Report, released last week, revealed that residential property activity across England, Wales, and Scotland has remained largely unchanged, with the market pausing as buyers and sellers wait for further clarity on fiscal policy. The report notes that, although the typical summer slowdown was evident in July and August, the anticipated increase in activity in September failed to materialise.
Brokers agree that the usual post-summer spike in purchase activity has been notably absent this year. “There has been a definite reduction in purchase activity in what is normally a very busy month,” said Lea Karasavvas (pictured top centre), managing director at Prolific Mortgage Finance.
“The threat of Mansion tax as well as the abolishment of stamp duty for first-time buyers are all rumours that have created a huge cloud of uncertainty for the purchase market and one the majority want clarity on before pulling the trigger which is totally understandable.”
The uncertainty is not only affecting buyers but is also shaping investor behaviour. Mair noted a shift in investment strategies, with clients diversifying into houses in multiple occupation (HMOs), short-term lets, and commercial properties in response to increased regulation and taxation. “As an independent mortgage brokerage, we’re seeing clients diversify and pivot as the market dictates, and the flip side is lenders are also doing very much the same,” he said.
Despite the pause in purchase activity, other brokers have not reported a significant increase in deals falling through. “We’ve not seen anything like that,” said Gareth Davies (pictured top right), head of mortgages at Eight Financial Advice. He added that while there is some interest in locking in rates ahead of the Budget, overall business volumes have remained steady. “We are submitting as many cases now as we have been all year,” he added.
For many brokers, however, the most frustrating aspect of the current environment is the proliferation of rumours and the resulting uncertainty. “The most frustrating element is that there is a clear scattergun approach of ideas from the current government which, when many do not come to light, create a sense of gratitude from buyers that they did not come to fruition,” Karasavvas pointed out. “This masks the impact of any negative outcome the budget does create, but does give rise to a huge air of uncertainty when false suggestions become amplified by the growing voice of social media.”
Looking ahead, brokers remain cautiously optimistic. “Whatever comes from the budget, we will then have clarity and the pent-up demand that has been waiting for the outcome will then press ahead,” Karasavvas said.
“With so many fixed rate deals coming to an end over the next 12 months, a pent-up demand of purchases awaiting the outcome of questionably but very important Budget, and a host of lenders who have taken the leash off the loan-to-income caps, it promises to be a very strong market in the near future. But at present, it’s tools down on the purchase front until the budget is announced.”
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