1 April 2025
If you are covering the latest Nationwide house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“On the first day of the new stamp duty rules, the Nationwide house price index has painted a picture of a stalling property market. Annual price growth came in at 3.9% in March, matching February’s figure, but there was no growth at all on a monthly basis, down from 0.4% growth in the month prior.
“Much of this slowdown can be attributed to the stamp duty changes which come into play today. Those who were hoping to move but did not get a sale across the line in time will now face hefty tax bills, often adding several thousand pounds to the cost of a move. With this in mind, it is no surprise that house prices stalled in March as many will have put their plans on hold knowing the tax bill that would have awaited them.
“First time buyers will feel the shock of the new stamp duty thresholds even more keenly, and their hard saved deposit will now need to be topped up to account for the additional costs. These prospective buyers already face significant affordability hurdles, so this end of the market could well see limited movement in the coming months while they grow accustomed to the even higher costs of homeownership.
“Figures out from the Bank of England just yesterday also highlighted the dampening effects of these changes. Net mortgage borrowing decreased by £0.9 billion to £3.3 billion in February, owed to people putting home moves on hold as they’d missed the opportunity to get a sale pushed through in time. Approvals for house purchases stayed flat, decreasing by just 600 to 65,500 in February. Both figures are likely to continue to fall in the next few months.
“There is no doubt that the housing market is already rather sluggish, and the stamp duty changes will do little to help matters. Prospective buyers may well hold out in hopes that interest rate cuts will come through, but the Bank of England is unlikely to make any significant changes in the near term.”
