UK house prices continue to rise following stamp duty deadline
Demand for houses has dipped following the end of first-time buyer relief on stamp duty, despite a cut in interest rates.
House prices grew by 0.6 per cent in April, according to Rightmove, the lowest at this time of year since 2016.
The number of new properties coming onto the market for sale is 14 per cent ahead of this time last year, however, with buyers spoilt for choice.
“It’s no surprise that April saw a lull in market activity as many of those who wanted to move home, did so before Stamp Duty increased from 1 April,” Toby Leek, President of NAEA Propertymark, the professional body for estate agents, said.
The end of the stamp duty holiday on March 31 led to a huge boost in the number of first-time buyers, with over 500,000 houses in the process of being sold in March.
The rush had been ongoing since the autumn Budget in October, with Santander reporting a 130 per cent increase in mortgage applications in the fourth quarter of 2024 compared to 2023.
“However, prices and the market long term remain resilient and with improved mortgage products now being introduced, buyers are finding extra room in their finances, keeping the cogs of the housing market rotating,” Leek added.
House prices cool as mortgage rates jump
Rightmove’s weekly mortgage tracker shows that the lowest available two-year fixed mortgage rate is now 3.72 per cent, down from 4.75 per cent last year.
Top UK lenders have recently been caught in an internal price war, with HSBC, Barclays and Lloyds all racing to attract customers.
Affordability is widely expected to continue to improve this year as interest rates fall and supply remains high, supporting demand.
“With higher supply of stock for sale than in recent months, buyers have been more spoilt in choice which is reflected in the lower growth in asking prices this month,” Tomer Aboody, director of specialist lender MT Finance, said.
“As interest rates reduce, we should see affordability increase, which in turn will encourage buyers to be active. This should produce a more buoyant market with higher transaction levels,” he added.