House prices rising slowly but stamp duty cuts loom

House prices rising slowly but stamp duty cuts loom

0:03 AM, 13th February 2025, About 9 hours ago

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Despite a slow start to the year, property prices are expected to surge, with first-time buyers driving the market when stamp duty changes come into effect in April.

According to e.surv house price index, house prices grew by just 0.1% in January 2025.

However, despite the slow growth, this marks the first time in four months that house prices have increased.

Nuanced picture of the housing market

E.surv’s house price index reveals the average sale price of a home rose by 0.1% to £352,300.

Despite this modest increase, average annual prices remain 3% lower than a year ago and nearly £25,000 below the peak of late 2022.

Rob Owens, head of research at e.surv, says: “Our latest house price index reveals a nuanced picture of the housing market in England and Wales in January 2025.

“The continued drag from southern England, particularly London, significantly impacts our overall metrics. This drag is largely due to affordability constraints, with stretched affordability and higher mortgage rates making it difficult for buyers to enter the market.”

According to e.surv, the North East and North West were the only regions experiencing year-on-year price growth. In contrast, much of southern England continues to struggle, with house prices decreasing by 3.3% year-on-year.

Surge in house prices in the coming months

However, Mr Owens says the coming months could see a surge in house prices due to stamp duty changes.

From April, stamp duty thresholds in England will be lowered. For first-time buyers, the exemption threshold will drop from £425,000 to £300,000, while for standard residential properties, it will fall from £250,000 to £125,000.

Mr Owens says: “However, there are signs of forward momentum. First-time buyer demand surged following the April Stamp Duty rise.

“With mortgage approvals increasing and the Bank of England’s recent base rate cut to 4.5%, we anticipate further market strengthening in the coming months.”


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