8 May 2025
If you are covering the latest Halifax house price index, please see the following comment from Rosie Hooper, chartered financial planner at Quilter Cheviot:
"House prices rose slightly by 0.3% in April, according to the latest Halifax House Price Index, bringing annual growth to 3.2%. The data points to a housing market that is beginning to stabilise following a turbulent period driven by tax changes and shifting mortgage conditions.
"Much of the recent volatility in transaction activity was the result of buyers rushing to complete purchases ahead of the stamp duty threshold changes that took effect in April. With the nil-rate band dropping from £250,000 to £125,000 and from £425,000 to £300,000 for first-time buyers March saw a sharp spike in completions as buyers raced to beat the deadline.
"Given the time it takes to finalise a property purchase, the April price data offers one of the clearest indications yet of how the market is functioning without the support of favourable stamp duty rates and it suggests a stabilisation rather than a significant drop. While activity may have surged earlier in the year, prices are now responding to a more subdued, post-incentive environment.
"That said, the outlook for borrowing costs has improved. Mortgage rates have edged lower in recent weeks, and attention now turns to the Bank of England’s interest rate decision this afternoon. A cut from 4.5% to 4.25% is widely expected, and any signal of further easing would provide a welcome boost to buyer sentiment as the year progresses.
"Still, affordability remains a fundamental constraint. High prices, elevated monthly repayments, and the upfront cost burden introduced by the stamp duty changes are continuing to weigh on first-time buyers and those seeking to move up the ladder. It’s a reminder that while rates may ease at the margins, structural issues in the housing market persist.
"Stamp duty in particular continues to distort behaviour. Short-term tax incentives may boost transaction volumes temporarily, but they often leave behind a softer market once withdrawn. A longer-term review of the tax is overdue. Stamp duty acts as a barrier to downsizing, discourages mobility, and glues up the housing chain particularly among older homeowners. Given that it contributes relatively little to government revenues, there’s a strong case for rethinking whether it remains fit for purpose in today’s market."
