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James Baker MRICS , Partner and Totnes office manager, recaps on the 2024 UK property market, and reviews what the 2025 market might look like for buyers and sellers.
The UK property market faces a relatively stable period after the uncertainty surrounding the change of government and the Autumn Budget which subdued the property market last year. Stags expects the housing market to perform well in 2025 with steady house price growth over the year. Our offices are already noticing an increase in buyer demand with higher than average viewing requests for this time of year and more new sales agreed compared to the equivalent 2024 levels.
One of the most significant changes this year is the increase in stamp duty rates, set to take effect on April 1st 2025. This adjustment is expected to impact home-buyers, particularly first-time buyers, as well as home-movers and investors.
The rise in stamp duty rates is likely to spur a rush of activity in the first quarter of the year, with buyers eager to complete their transactions before the deadline. Property data reveals that the number of first-time buyers actively engaging with agents has risen by 13% compared to the same period in 2024. This increase suggests that many are aiming to finalise purchases before the April 1st deadline, when the stamp duty threshold for first-time buyers will revert from £425,000 to £300,000. The nil rate threshold will also be reverting to its previous rate from £250,000 to £125,000.
The availability of stamp duty-free homes for first-time buyers will differ greatly by region. The West Country will have more homes that fall within the £300,000 threshold in comparison to London, making this an attractive region for first-time buyers looking to benefit from the tax relief. For properties priced close to £300,000, there may be heightened negotiation tactics, as both buyers and sellers attempt to mitigate the higher costs through price adjustments.
There will be no change to the base rate in January as the next Bank of England Monetary Policy Committee meeting is on the 6th February 2025. The latest Bank of England’s meeting on 19th December 2024 was the last opportunity to lower rates but they decided to hold interest rates at 4.75%. This was largely due to the fact that the UK inflation rate had gone up for the second month in a row, hitting 2.6% in the year to November.
Despite recent rises to inflation, it is widely expected that interest rates will be cut in 2025. During an interview with the Financial Times on 4th December, Bank of England Governor Andrew Bailey signalled the UK could see four quarter point interest rate cuts next year. Interest rates are difficult to predict as there are many variables, but this could see interest rates fall from 4.75% to 3.75%.
If you are considering buying or selling in the West Country, it is a perfect time to make the first move and find out what your home is worth. The importance of aligning with the right agent and marketing strategy remain as vital as ever.
Our local Stags teams would be delighted to hear from you and guide you through your next steps.
