Housing market sees strongest start in three years
Newly released data from Zoopla (https://www.zoopla.co.uk/) has revealed that the housing market started strongly in 2025, with new sales agreed up by 12% year-on-year as some buyers attempt to avoid paying higher stamp duty from April this year.
The momentum in sales market activity that built up over 2024 has run into 2025, despite concerns over mortgage rates drifting higher and a softening in UK consumer confidence.
The number of homes for sale is also 10% higher than a year ago. This means 2025 is starting with the highest number of homes for sale (31) per estate agency branch for seven years. More sellers mean more buyers, with demand for homes 13% higher than the same time last year.
The annual rate of UK house price inflation is running at 2%, up from -0.9 per cent a year ago, with sales growth supporting modest price gains. This is the highest level of house price growth since April 2023. The average UK house price is £267,700, an increase of £5,200 over 2024 following a £2,400 decline over 2023.
House price inflation increases across all markets
House prices have returned to growth across the UK on rising sales. Prices are rising most quickly in more affordable areas with above-average growth in the number of jobs.
The fastest growth in average house prices is in Northern Ireland (7.7%), where prices are rebounding off a low base, followed by North West England (3.2%).
Data from the ONS shows that the North West region of England, Scotland and Northern Ireland have recorded faster growth in jobs over the last two years compared to regions in southern England. Locally, prices are rising fastest in Wigan (5.6%) and Motherwell in Scotland (4.9%).
House prices are rising more slowly in southern England where prices are above average and it is taking longer for rising incomes to help reset housing affordability. House prices have risen by less than 1.5% in London, the South West, South East and Eastern regions of England over the last 12 months.
There are signs that the recent upturn in prices is starting to level out as mortgage rates drift higher and buyers have plenty of homes to choose from. This will keep price inflation in check over 2025 but the current north-south divide in home price inflation is expected to continue over the year ahead.
Higher stamp duty from April boosts demand in key price bands
Housing market sees strongest start in three years
The Autumn Budget confirmed that temporary reliefs from stamp duty will end in April 2025 in England and Northern Ireland. As a result, first-time buyer demand jumped by over a third in November and December 2024 in the price bands where stamp duty for first-time buyers will increase the most from April 2025, between £300,000 and £625,000. The greatest savings are to be had by FTBs looking to buy in London and higher value areas of South East England.
First-time buyer demand increased more slowly below £300,000, where first-time buyers will continue to pay no stamp duty, and over £625,000 where there remains no tax relief from stamp duty for first-time buyers.
It is now too late for first-time buyers to agree and complete property purchases before the end of March 2025 and pay lower stamp duty. However, it is a positive sign that first-time buyer demand remains higher year-on-year, in line with the wider market. Concerns over a possible cliff edge in home buyer demand after April are overdone.
Homeowner demand also increased in response to the stamp duty changes albeit to a lesser degree. The extra stamp duty payable by homeowners from April (up to £2,500 per purchase) is less than the additional cost for first-time buyers buying homes in the £350,000 to £625,000 price range which will be £2,500 or higher.
Buying a first home in London for the average first-time buyer price of £420,000 will result in stamp duty increasing from £0 to £6,000 from April. For the typical FTB property in South East England (£332,500) the increase will be from £0 to £1625.
What about Harlow & what do Jukes Estate Agents think?
Sales & Marketing Director of Jukes Estate Agents Harlow Geoff Flewers says: “I do not doubt the validity of these figures one bit. However, these wide sweeping blogs by the likes of Zoopla, Rightmove, Nationwide etc. have to be a national picture. When it comes to one town like Harlow, what’s going on in the rest of the UK can sometimes be irrelevant. “
He continued: “Harlow has seen an increase in buyers. However, whereas nationally there was a 13% increase of buyers to a 10% increase in stock, Harlow has seen a 15% increase in stock and only an 8% increase in buyers. This means a negative ratio of buyers per property. In Harlow, this is almost certainly down to the surge of property that came to market over the period between Dec 26th 2024 – Jan 1st 2025 as estate agents continue to buy into this ridiculous ‘Boxing Day Bounce’ nonsense.
” I am confident that during the next 2-3 months Harlow will start to see an improvement on what has been a sluggish start to 2025.”