1 November: Stamp Duty Nil-Rate Thresholds To Fall In April
- Annual house price inflation at 2.4% in October
- Monthly increase in house prices at 0.1%
- Average UK property price is £265,738
According to the latest House Price Index from Nationwide building society, the price of a typical UK home increased by 2.4% year on year in October, down from 3.2% in September, writes Kevin Pratt.
House prices rose by 0.1% month-on-month in October.
Commenting on the figures, Robert Gardner, chief economist at the society, said: “Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the significantly higher interest rate environment.
“Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year.”
Nationwide is expecting the economy to continue to recover steadily, which it says will allow housing market activity to strengthen gradually as properties become more affordable thanks to a combination of lower interest rates and earnings outpacing house price growth.
The housing market is absorbing the fall-out from this week’s Budget, in which the Chancellor, Rachel Reeves MP, confirmed the temporary increase in nil rate stamp duty thresholds in England & Northern Ireland would expire on 31 March 2025.
For first-time buyers purchasing a property valued under £500,000, the nil rate threshold will fall to from £425,000 to £300,000. For other residential buyers, it will fall from £250,000 to £125,000.
Gardner said: “The main impact of the stamp duty changes is likely to be on the timing of property transactions, as purchasers aim to ensure their house purchases complete before the tax change takes effect.
“This will lead to a jump in transactions in the first three months of 2025, especially March, and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes.”
Nationwide’s analysis for the year to June 2024 suggests that the stamp duty change will affect around one in five first-time buyers, with the impact varying across the country because of the difference in house prices.
It says the most pronounced effects are likely to be in the South East of England, where 40% of first-time buyers paid between £300,000 and £425,000 for their homes.
The areas least affected are likely to be Yorkshire & The Humber, the North of England and Northern Ireland, where less than 10% of first-time buyers paid between £300,000 and £425,000 for their homes.
Content retrieved from: https://www.forbes.com/uk/advisor/personal-finance/2024/11/01/house-prices-updates/.
