How the UK Spring Statement and US tariffs will influence the 2025 property market
- Tailor My Property
- Apr 15
- 3 min read
The Spring Statement has historically played a less significant role for the UK economy than that of the Autumn Budget, but this year Chancellor Rachel Reeves had plenty of eyes on her thanks to the government’s so-called ‘£22 billion black hole’, the weak economy and the impact of US President Donald Trump’s tariffs.
Below we break down how the statement will impact the UK property market in 2025.
Stamp duty land tax
Despite many hopes that it would be delayed, stamp duty land tax reforms officially came into effect at the beginning of this month after a temporary reduction from the Sunak government in 2022.
Starting from the beginning of April first time buyers will no longer receive the full relief for properties up to £425,000, as the threshold drops to £300,000, with a reduced relief for properties between £300,001 and £500,000 instead.
For home movers the 0% stamp duty rate is now only applicable for properties up to £125,000, with a 2% rate for properties between £125,001 and £250,000. Meanwhile the higher stamp duty rates for more expensive properties remain unchanged.
These changes mean that many home buyers will face higher tax costs, and to the disappointment of many in the market Reeves did not introduce any new or additional schemes to incentivise buyers.
Labour’s house building policies
In her Spring Statement speech Reeves hailed the impact of the government’s national planning policy framework reforms for boosting economic growth with house building at the centre of it all.
According to the Office for Budget Responsibility house building is forecast to hit a 40-year high, with reforms to the planning system, mandatory housing targets for councils and green belt relaxations expected to boost the economy by £6.8 billion and help meet the government's target of 1.5 million new homes in England over the next five years.
Many have doubted the viability of this promise due to scepticism around labour shortages in the construction sector and housebuilding slumping to a 12-year low. In an effort to stem this shortage in the building force Reeves announced a £600 million initiative to train 60,000 construction workers.
Mortgage rates
In another shake up for the market some major lenders are set to cut rates on mortgages as a result of turmoil from US President Donald Trump's tariff policy and expectations that UK interest rates could be further cut this year.
The Bank of England’s main rate stands at 4.5% and was forecast to be reduced twice this year but the uncertainty created by US tariffs has increased the expectation to three cuts.
Mortgage brokers predict that some mortgage rates may fall to as low as 3.79% in the coming weeks, with Barclays already cutting rates on some mortgages to below 4%. This marks the first ‘big six’ lender to enter the sub-4% fixed-rate market after similar announcements by some smaller lenders earlier this week.
House prices
According to the latest Halifax House Price Index the average UK house price experienced a slight dip in March, falling by £1,575 and bringing the typical value to £296,699 from £298,274 in February, a 0.5% decrease month-on-month.
This dip was widely expected after an increase in demand and prices was registered in January as buyers rushed to beat the March stamp duty deadline, with that month registering more house sales than in January and February combined.
With further Bank of England base rate cuts anticipated alongside positive wage growth, mortgage affordability should continue to improve and a modest rise in house prices is expected.
Why UK property is a strong investment in 2025
As the last week of financial market turmoil proves that stocks and shares can be a volatile investment, investors can always explore property as a safer and more traditionally reliable asset.
While the UK property market may experience normal ups and downs, forecasts predict that it will remain stable with potential for long-term appreciation thanks to infrastructure development, declining mortgage rates and a housing shortage in major cities leading to strong rental yields.
With several factors influencing the UK property market it’s important to consult a professional before making your next move. Tailor my Property has a professional network of property, finance and investment professionals who can assist with strategies suited to your individual needs.
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