The UK housing market has hit a new milestone, with the average house price climbing to £298,083 in November, according to Halifax’s latest house price index. Despite predictions of a market slowdown, prices rose by 1.3% in November and are up by 4.8% over the past year. Buyers are showing no signs of retreat, driven by urgency ahead of upcoming changes to stamp duty and a slight easing in interest rates.
Buyers rush as stamp duty deadline looms
A key driver behind the market’s momentum is the impending stamp duty change in April 2025. Many buyers, particularly first-time buyers, are racing to complete their purchases before the new thresholds take effect.
Jonathan Hopper, CEO of Garrington Property Finders, highlighted the urgency: “Hesitation has turned to hurry in some parts of the market, especially among first-time buyers racing to complete their purchases before the Stamp Duty thresholds change at the end of March. This sense of urgency is prompting some buyers to view in haste and offer high in order to secure a home now.”
However, Hopper cautioned that this urgency isn’t universal, noting a more measured approach at the higher end of the market: “Wealthy buyers who have rerun the numbers in the wake of a largely unfavourable Budget remain highly price sensitive. The supply of good quality prime homes for sale is strong, and buyers at this end often find themselves spoilt for choice.”
Interest rates stabilising but affordability remains a hurdle
The Bank of England’s recent rate cuts have provided some relief, but mortgage rates remain relatively high, leaving affordability a pressing issue for many buyers. Sarah Coles, head of personal finance at Hargreaves Lansdown, observed: “The sheer cost of homes is likely to be pricing people out, especially given that mortgage rates remain relatively high. Wages have been rising faster than inflation since property prices hit their pandemic highs, which will have eased finances slightly, but it’s still a huge ask for people to stretch onto the property ladder.”
The average deposit for first-time buyers now stands at £55,372, according to government data. Coles emphasised the importance of saving strategies: “When you’re carefully salting away money for a property purchase, it’s vital to consider the Lifetime ISA. If you’re aged 18-39, you can put up to £4,000 a year into a LISA, and the government will top it up by 25%—or up to £1,000 a year.”
What’s next for the housing market?
Nathan Emerson, CEO of Propertymark, pointed to a positive transformation over the year: “We have seen an encouraging transformation across the year in terms of a resilient trend of house price growth. Affordability and overall confidence in the sector have also seen a boost throughout the year so far, and with interest rates now easing, many buyers will have increased confidence to approach the housing market.”
However, he noted that the market could face a spike in listings and sales activity ahead of the April 2025 stamp duty changes, which may lead to price volatility.
The housing market remains a mixed bag. While urgency drives demand in some segments, affordability challenges and high mortgage rates continue to pressure first-time buyers. Sellers, particularly those in the prime market, may face increasing competition and price sensitivity. As the stamp duty deadline approaches, could we see another “stamp duty stampede”? For landlords and investors, the coming months will be pivotal in shaping the UK’s property market.
