28 February 2025
“The UK property market kicked off the year with 95,110 residential transactions in January. While this is down marginally compared to December, though only by less than 1%, it is a considerable 14% rise compared to January 2024.
“While transactions dipped slightly on a monthly basis, we can expect monthly growth in transactions to pick up from here on out as buyers push sales through ahead of the stamp duty changes coming into play in April. The stamp duty threshold for existing buyers is set to halve from £250,000 to £125,000 in April and will result in an additional tax charge of up to £2,500. For prospective first time buyers, the impact will be even more severe, as the stamp duty threshold will be slashed from £425,000 to £300,000, resulting in a stamp duty bill of as much as £5,000.
“Nationwide data out this morning showed that the stamp duty changes may also cause house prices to bloat somewhat, with prices rising 0.4% in February compared to just 0.1% in January. Should prices continue to increase, buyers will need to take care not to end up paying inflated prices as they could end up in a similar position than if they had just bided their time and suffered a larger tax bill. What's more, people looking to purchase ahead of the stamp duty changes will be very hard pressed to get the sale through in time, so it will be vital not to get caught out by a double whammy of a higher than necessary house price and a hefty tax bill.
“For first time buyers, taking the first step onto the property ladder will become all the more expensive. Targeted measures to help this cohort will be crucial to reigniting activity at the lower end of the market, which has been repeatedly blighted by affordability pressures.
“If you are considering moving home in 2025, seeking professional financial and mortgage advice will help you navigate the changing landscape and find the best deals.”
