Property analysts forecast strong spring as stamp duty deadline looms
Activity in the UK’s property market closely followed government policies on tax last year, something set to continue as the reality of the stamp duty deadline sinks in for first-time buyers.
Real estate experts have predicted a burst of activity in early spring ahead of the end of stamp duty relief for first homes, which will come into effect on 31 March.
Currently, no stamp duty is paid on property purchases up to £425,000 for first-time buyers. This relief is set to end, and first-time buyers will face the same stamp duty rate as other buyers, which is zero tax for purchases up to £300,000.
“[The] looming cost adds another layer for consideration, especially with mortgage rates remaining stubbornly high,” Nick Leeming, Chairman of Jackson-Stops, said.
“We expect this elevated level of activity to continue through the early months of 2025, as buyers push to complete their transactions ahead of the stamp duty deadline,” he added.
President of Onthemarket, Jason Tebb, similarly described the end of the stamp duty holiday as “extra motivation” for first-time buyers, adding that any further cuts to the interest rate from the Bank of England would be “timely” and “give further impetus to the spring market”.
“This month we have been seeing a good number of market appraisals, which is often a precursor to a strong spring market,” Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, added.
Will the market slow in April?
The UK housing market had its best year since 2021 last year, according to Halifax, after lower mortgage rates and higher incomes began to ease financial pressure for buyers.
Jackson-Stops expects house prices to “stay firm” in 2025, with rises of up to four per cent in some local markets.
Real estate agents Hamptons has similarly forecast three per cent price rises across Britain, with four per cent price rises in London in the fourth quarter of 2025. This would see the capital outpacing other regions for the first time since 2015.
But once the stamp duty deadline passes, it’s possible that affordability pressures will start to show themselves more clearly.
“The full impact of the Budget has yet to be factored in, and therefore, a true indication of where we are at would be around the spring, once the stamp duty holiday comes to an end,” Tomer Aboody, director of specialist lender MT Finance, said.
“Let’s hope a further cut in interest rates comes before then, helping the market stay productive and confident,” Aboody added.
Head of residential research at Knight Frank, Tom Bill, also suggested that the impact of the Budget will be a slower housing market in 2025.
“The current rate of house price growth will come under more pressure as higher borrowing costs triggered by the Budget start to bite,” he said.
The Bank of England is likely to cut interest rates at a slower pace than previously expected in 2025 due to inflationary pressures from the autumn Budget.