Stamp duty and uncertainty keeping UK mortgage market in holding pattern

The UK mortgage market is caught in a holding pattern. Geopolitical instability, a punishing tax environment, and a wave of remortgaging clients unfamiliar with variable products are converging to create one of the most complex operating environments in years.

Luther Yeates (pictured top), founder and head of mortgages at Orton Financial, told Mortgage Introducer the mood is one of reluctance rather than momentum, and he believes the government bears much of the responsibility.

What is holding the UK mortgage market back?

Yeates is direct about where sentiment currently sits. Clients are delaying decisions, lenders are reporting some of their worst quarters in years, and brokers are struggling to grow.

"You basically have clients that are just tracking down towards either the next election in the US or the next election here, because we're kind of seeing either way," he said. "Everyone is impacted by anything that happens in the States and at the moment, everything that has happened hasn't been particularly great for us."

That uncertainty extends to hiring decisions. "We're all in a situation like I am, where it's expensive to employ people. That's only going up. There isn't really any relief anymore offered for anything, so you kind of end up in a situation where you're reluctant to expand, hire and grow because you're in a market where it's not really pro-growth at the moment."

Lender conversations are confirming the trend. "The lenders we talk to say business volumes for them are down. Some of them have had their worst quarters they've had in years, and it's just because no one wants to do anything at the moment."

Stamp duty: the biggest drag on housing activity

When asked what the government could do to restart the market, Yeates didn’t hesitate. Stamp duty, he argued, is the single biggest structural barrier to housing transactions, and its impact is felt at every price point.

"If someone is drifting outside of a stamp duty exemption, it's money you can't borrow. It's suddenly a lot of money. You get into the territory of a normal couple buying a house now, who will spend most of the net salary of one of those borrowers on stamp duty if they try and move home."

At the higher end, the figures become even more striking. Yeates described a recent bridging transaction where his clients – a professional couple working in London – faced a stamp duty bill of £450,000. "It's like the price of a house. You have to find it in cash on top of the transaction," he said. "We've got a very weird market where in a relatively short period of time we've gone through properties being completely exempt from stamp duty to a very expensive environment."

Buy-to-let consolidation gathers pace

Yeates has noticed a clear structural shift in the buy-to-let sector. The regulatory and tax changes of recent years have effectively driven out the small-scale or accidental landlord, leaving the market increasingly dominated by professional investors.

"If their objective was to put anyone off becoming what you might call the accidental landlord, the kind of one-time landlord, there’s very little interest now, because it's difficult to get someone out the property if you need to," he said. "I've got a client at the moment, they've got about 55 properties. They phoned me and said there's a landlord selling seven properties at once. They said, ‘Great, I'll buy them all’."

The 2026 remortgage wave and the variable rate challenge

According to UK Finance's mortgage market forecast for 2026, around 1.8 million fixed-rate mortgages are due to reach the end of their terms this year – a significant volume of potential business for mortgage brokers. Yeates sees opportunity but flags a challenge many may be underestimating. A large number of those clients will be encountering variable-rate products for the first time.

"Most people have never taken a variable mortgage and don't understand it. There's a lot of business to be done, but it's around helping clients understand something which they've very rarely gone for beforehand." Yeates also pointed to a broader concern – lenders extending income multiples to maintain affordability in a high-rate, high-price environment, with some clients now accessing borrowing at 6.5 times income. "It will just create the next problem that will come around," he said.

The government, he argued, must act first. "We know we're in that environment where rates aren't where they should be, and then we just have a government that they want the housing market to move, but they're the ones that are really holding it back."

Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.