The British housing market has experienced its strongest start in three years, with new sales up 12% year-on-year in January and the number of homes for sale 10% higher than a year ago according to property website Zoopla. With more homes available on the market there is also a surge in new people looking to buy, with demand for homes also 3% higher than the same time last year.
Below we explore which factors are helping the UK property market enjoy a boom in activity.
Stamp Duty Land Tax
Last year’s autumn budget confirmed that the temporary reliefs in stamp duty land tax would come to an end in England and Northern Ireland in April 2025, meaning that certain buyers are rushing to complete transactions before the deadline passes and higher rates of stamp duty are imposed.
According to Zoopla’s latest figures, first-time buyer demand jumped by more than a third in the months of November and December in the price brackets (between £300,000 and £625,000) where stamp duty will increase the most from April.
Under the current rules, first-time buyers start paying stamp duty on purchases over £425,000 pounds, but this will fall to £300,000 on April 1. Other buyers currently start paying the tax on purchases over £250,000 and this will halve to £125,000 under the new rules.
More houses available to purchase
According to new year figures from property platform Rightmove, a record number of new sellers have come to the market since December - up 11% annually from last year. The number of buyers contacting agents during this period has also jumped 9%. This indicates that several sellers are now entering the market with a newfound confidence, providing buyers with fresh choice and increasing market activity.
House price growth
Recent data also indicates that the annual rate of house price inflation is currently at 2%, compared to -0.9% a year ago, indicating the highest level of price growth since April 2023.
This means that the average house price in the UK now stands at £267,700, up £5,200 over 2024 with the number of homes for sale 10% higher than the same period last year.
Lower mortgage rates
At the latest meeting of the Monetary Policy Committee, the Bank of England decided to lower the base rate to 4.5%, from 4.75%. This followed several rate cuts in 2024 which means the base rate, which is used as a guide for interest rates on mortgages and other loans, has been reduced from the peak of 5.25%, and some lenders have started to introduce more competitive fixed-rate deals for buyers as a result.
HSBC UK has reduced mortgage rates across its range of residential and buy-to-let mortgages by up to 0.47% for existing customers, and buy-to-let rates for those looking to remortgage to HSBC UK have been cut by up to 0.23%.
Meanwhile, Skipton International has responded by reducing mortgage rates across its buy-to-let fixed rate range and adding a 3-year mortgage product at 5.89%.
With a series of factors positively impacting the UK property market, and with the stamp duty deadline looming, now is the ideal time to move ahead with property investment plans in the UK. That said, individual lenders will set their own mortgage rates and terms so it’s recommended to shop around for the deal best suited to your personal needs and goals.
Contact Tailor My Property today and connect with our expert network of financial and property professionals who can assist and advise as you explore and navigate these exciting mortgage and property opportunities.
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