The Intermediary –- June 2026 - Flipbook - Page 22
RESIDENTIAL
Opinion
Are we loc
the next ge
he UK housing market
has always relied on
movement. Firsttime buyers (FTBs)
enter at the boom of
the ladder, existing
homeowners trade up as their
circumstances change, and those at
the top of the chain move on, creating
opportunities throughout the market.
Today, however, that traditional cycle
is showing signs of strain.
While headline figures suggest
stability or even growth, beneath the
surface there is a growing disconnect
between buyer demand and lender
appetite. In particular, first-time
buyers are increasingly finding
themselves locked out of some of
the most affordable routes into
homeownership; not because they
lack income, deposits or ambition, but
because lending criteria are becoming
more restrictive.
Recent transaction data illustrates
the challenge. The apparent year-onyear growth in housing transactions
T
between April 2025 and April 2026
needs to be viewed in context.
Much of the increase reflects
the unusually low transaction
levels seen immediately aer the
Stamp Duty changes in April 2025,
rather than evidence of a genuinely
buoyant market.
What we are seeing instead is a
period of normalisation, driven
by buyers and sellers adjusting to a
higher but more stable interest rate
environment.
WILLIAM COE
is associate director –
mortgages at Cleerly Ltd
Atypical conditions
Historically, a shortage of housing
supply combined with continued
demand would point towards a seller’s
market. Yet current market conditions
are creating a contradiction to those
traditional paerns.
Higher mortgage rates continue
to increase borrowing costs, while
working families face mounting
financial pressures from childcare
costs, Council Tax increases,
household bills and broader
inflationary pressures.
At the same time, affordability
assessments have become increasingly
stringent, limiting the amount
borrowers can access even when
they have strong incomes and solid
financial records.
The result is that many
homeowners who would typically be
looking to upsize are instead choosing
to remain where they are. This has
a direct impact on housing stock
availability, particularly for first-time
buyers and first-time movers.
Fewer families moving up the
ladder means fewer properties
becoming available lower down
the chain.
This creates a wider structural issue
for the market. For homeowners at
the top of the chain, conditions may
appear favourable because supply
remains constrained. However, a
seller’s market only functions when
there are buyers capable of progressing
transactions. Increasingly, sellers are
discovering that while there may be
interest in their properties, there are
fewer buyers able to secure the finance
needed to complete purchases.
Affordable entry
Nowhere is this more evident than
within the apartment and flat sector.
Flats have traditionally represented
one of the most affordable entry
points into homeownership,
particularly in urban areas where
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The Intermediary | June 2026
