News

How much UK House Prices Rise Amid Stamp Duty Changes?

In February 2025, UK house prices showed a continued upward trend, marking the sixth consecutive month of price increases. According to data from Nationwide, the average house price rose by 0.4% compared to January, reaching £270,493. This rise represents a 3.9% annual increase, slightly lower than the 4.1% growth recorded in January but still above expectations.

A significant factor behind this price surge is the looming change in stamp duty regulations. Starting April 1, 2025, the stamp duty tax-free threshold for first-time buyers will be reduced from £425,000 to £300,000. This means that homes purchased above £300,000 will incur a 5% stamp duty charge, increasing the upfront costs for buyers. As a result, many first-time buyers are rushing to purchase properties before the tax changes take effect, driving up demand and house prices.

Despite affordability challenges, the market remains resilient. Robert Gardner, Nationwide’s chief economist, pointed out that there was a notable surge in transactions during late 2024, with deals 14% higher than the same period in 2023. However, total transactions are still 6% lower than in 2019, highlighting ongoing market pressures. As the stamp duty changes draw closer, prices are expected to continue rising in the short term, but a potential softening of the market is anticipated after April as the rush subsides.

For prospective buyers, especially first-time purchasers, acting quickly may be crucial to avoid the higher stamp duty costs. Sellers could see increased competition, resulting in faster sales and potentially better prices in the immediate term.

Looking ahead, the housing market’s performance will depend largely on how buyers and sellers respond to the upcoming changes and broader economic factors like interest rates and wage growth.

For more details, you can visit the following sources:

Strotra