The rush to purchase property before the Stamp Duty cut-off next month is reflected in recent house price growth.
According to the Nationwide Building Society, property prices in the UK jumped 0.4% between January and February. And that figure is expected to increase even higher as buyers attempt to conclude their property transaction before the April 1 deadline. Incidentally, around 25,000 first-time buyers in England are expected to miss it, says Rightmove.
Right now, the average property price in the UK is £270,493, according to Nationwide’s latest findings.
The rise in property prices is the sixth increase in a row and a 3.9% annual rise.
Economist Ashley Webb of Capital Economics, believes it isn’t just the forthcoming Stamp Duty change that is increasing the value of property. The statistics, he said, implied that buyers were undeterred in general. To the extent that…”the housing market continues to shrug off both the weak economy and the recent rises in mortgage rates,” he said.
Flats fall from grace in UK property market
Meanwhile, one area of the market which isn’t faring quite as well as others, is in apartments (or flats). According to Zoopla figures, the values of flats has only grown 7% over the past five years, while houses have gone up by almost a quarter (24%).
Zoopla’s own analysis blames the period during the pandemic when house owners wanted more space, preferably houses with a garden. Its spokesman says the market in flats still hasn’t recovered from this. This is compounded with the fears over poor cladding in recent years.
Rightmove 4th most popular website in UK
Meanwhile, a report by online property portal Rightmove showed that a total of 16.4bn minutes was spent viewing properties on its website last year. That was a 6% increase on the previous year, and resulted in the portal being the fourth highest website in the UK for hits. Only the BBC, Reach newspapers and the government’s own website received more visits in the past 12 months.
Property prices grew 4.6% in December year-on-year, according to official government figures.
Published this week the HM Land Registry price House Price Index also showed an annual increase for November, albeit quite a bit lower at 3.9%.
The figures recorded the average property in the UK at £268,000 for the last month of the year. In terms of price increases, three areas stormed ahead – Northern Ireland, Scotland and the North East. House prices there grew 9.0%, 6.9% and 6.7% respectively.
No rise for London homeowners
That’s in sharp contrast to London where there was no growth year-on-year in December. And, in fact, property prices fell by 0.3% between November and December 2024. The high property prices in London mean that the least affordable areas of London were still higher than many of the more upmarket areas in the North East.
House values also increased in both England and Wales for the year to December 2024. This was at a lower rate – 4.3% in England and 3% in Wales.
Stamp Duty changes expected to impact prices
Analysts believe the property growth figures won’t be as spectacular towards the end of 2025. That’s because more homes are coming on to the market and, at the same time, Stamp Duty costs are reverting to their previous figures. That means having to pay stamp duty on properties priced £125,000 and over. First-time buyers will have to start paying tax on homes up to £300,000 (instead of £425,000). Higher-rate tax payers will also see an increase in capital gains tax, up to 24%.
The market is still expected to be busy however, thanks to a stabilising economy and lower mortgage interest rates. Wages have also gone up over the past year.
Yopa chief executive officer, Verona Frankish, said: “We’ve already seen one interest rate reduction so far in 2025 and it’s shaping up to be a year of even greater positivity where the property market is concerned.”
Private landlords in England and Wales could end up forking out thousands of pounds in order to get their properties compliant with new government energy efficiency rules.
Under the government’s Plan for Change initiative all private rental properties will have to meet minimum energy standards by 2030. Government analysts say the costs to upgrade to a new Energy Performance Certificate (EPC) level ‘C’ will cost landlords anything from £6,100 to £6,800.
The proposal is currently out to consultation, with landlords and renters urged to make their feelings known.
A spokesman for the Department for Energy Security and Net Zero said the move could benefit renters by cutting back their fuel bills to the tune of £240 a year.
Landlords to look at solar panels and cavity wall insulation
In order to remain complaint with the proposed legislation landlords will have to invest in double glazing, cavity wall insulation and other measures to ensure tenants remain warm in their homes. Solar panels and smart meters may also be considered.
Deputy Prime Minister and Housing Secretary Angela Rayner said: “Through our Plan for Change we are driving up housing standards, improving quality of life, and slashing energy bills for working people and families.
Ed Miliband, Energy Secretary, added: “These plans will also make sure that all private landlords are investing in their properties, building on the good work of many to upgrade their homes to Energy Performance Certificate C or higher already.”
Nearly half of landlords already compliant
The good news is that around 48% of private rental homes are already compliant with the new proposed government standards. The current EPC standard for private rental properties is ‘E.’
One of the proposals in the consultation is whether to give landlords an additional two years after the 2030 cut-off to get up to standard. Another is to limit the cap for landlords to a cost of £15,000 per property, while a third is to introduce an affordability exemption, limiting the cap to £10,000, for a property with a lower rent or a reduced council tax band.
The new Labour government recently announced that from 23 December 2024, local housing authorities in England do not need to obtain confirmation from the Secretary of State if they wish to implement a selective licensing scheme – of any size.
Local authorities are increasingly adopting selective licensing schemes to improve standards in the private rented sector. These schemes require landlords to obtain licenses and meet certain conditions, with penalties for non-compliance.
Research from Yuno showed that the introduction of selective licence schemes had little impact on improving standards, although local housing officers report that it can help improve enforcement ‘on the ground’ especially as they can impose civil penalties.
This is quite a big change to the current rules. Although the local housing authorities must consult for at least 10 weeks on the proposal, Yuno is aware that the reach and effectiveness of these consultations can vary dramatically. In some cases, this means they can be implemented without the landlord’s knowledge unless they are proactively keeping up with lettings legalities or their rental property is being managed by a qualified agent.
Paul Conway, CEO of Yuno, explained that the implications for landlords could be incredibly negative – and costly. “This will increase the chances of all landlords & agents being caught out by widening licensing in an area, especially if it’s not well publicised. It could also increase their ongoing costs due to the licence fee charged.” At Yuno, we’ve seen fees for new applications in Leeds as high as £1,225 versus others such as Ashfield which charge £350.
Not licensing a property correctly could currently lead to fines of up to £30,000 per offence.
However, Paul goes on to say that for qualified agents, this is a good opportunity to talk to self-managing landlords or landlords that currently use their let-only service to see if they would prefer to move to full management. Supporting landlords to identify and fulfil licensing requirements quickly and efficiently, be it a new licensing scheme or the Renters’ Rights Bill being implemented in 2025.
Which areas are affected?
According to data from Yuno, there are 37 licensing schemes across England that are currently under consultation or could be coming soon to a council by which your properties will be affected by, some key schemes include:
Blackpool – Selective Licence Scheme
Carmarthenshire – Additional Licence Scheme
Gateshead – Selective Licence Scheme
Gelding – Selective Licence Scheme
Lancaster- Selective Licence Scheme
Manchester – Selective Licence Scheme
Mansfield – Selective Licence Scheme
Newcastle upon Tyne- Additional Licence Scheme
North Lincolnshire- Selective Licence Scheme
North Yorkshire – Selective Licence Scheme
Reading – Selective Licence Scheme
Rochdale – Additional Licence Scheme
Salford – Selective Licence Scheme
Sandwell – Additional Licence Scheme
Stockton-on-Tees – Selective Licence Scheme
Walsall – Additional Licence Scheme
London will see the most new licence schemes, including:
City of Westminster – Selective Licence Scheme
London Borough of Barking and Dagenham – Additional Licence Scheme
London Borough of Enfield – Additional Licence Scheme
London Borough of Wandsworth – Selective Licence Scheme
London Borough of Waltham Forest – Additional Licence Scheme
This is just a selection of licence schemes/consultations – so landlords and agents need to be alerted to the fact they may well be implemented shortly and check if their area is going to be affected.
To find out about all the areas and licensing schemes either being introduced or under consultation, do get in touch with Yuno. In addition to assessing your existing portfolio for licensing, Yuno can also support you with planning, fire safety and energy issues, helping ease the pressure of complex letting compliance for landlords and agents, saving time and money.
For more information, contact Yuno at paul@goyuno.com
Yuno has been developed to help businesses and property owners navigate complex UK legislation and compliance requirements by reducing risk and supporting growth using time-saving insights, tools, and resources needed to keep properties safe, secure, efficient and compliant.
A number of prominent sales and/or lettings companies already use Yuno, including Savills, Hamptons, Martyn Gerrard, Paramount and Aspire to name a few. Yuno allows the monitoring and reporting of each individual property, including within large portfolios, to clients that helps safeguard their investment.
For press commentary, contact paul@goyuno.com
Phone number – 020 3848 2205 Website – www.goyuno.com Social media outlets – support@goyuno.com
House prices fell for the first time in nine months. The fall of 0.2% was on a monthly basis, and between November and December last year.
That’s according to the latest housing data from the Halifax which showed the cost of the average property sat at £297,166 in December. However, despite the fall, property is still 3.3% higher than the same period last year.
Northern Ireland saw the biggest annual increase in house prices, at 7.4%. Next was the North West with 5.3% and the North East at 4.6%. The lowest annual increase in the average property value – 0.2% – was in Scotland.
Halifax and Nationwide collide over data
The Halifax results are in sharp contrast to Nationwide’s data. The latter reported that property had, in fact, gone up by 0.7% between November and December. Halifax sample 3,000 more data points than Nationwide and these are larger in northern parts of England, accounting for some of the discrepancy.
Amanda Bryden, head of mortgages at Halifax, attributed the higher figure in November and earlier in the year to increased demand. This, she said, had been triggered by the lowering of mortgage interest rates together with an increase in wages and the lowering of price inflation.
“Providing employment conditions don’t deteriorate markedly…buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year,” she added.
Developers noted increased demand after rates cut
York-based house developers Persimmon confirmed it had seen an increase in buyer demand when mortgage interest rates had first fallen in summer last year. Its total sales for 2024 was around 15,500 properties. This was almost 600 more properties than the previous year.
The Bank of England is expected to reduce its base rate further this year, prompting mortgage lenders to reduce interest rates. Certain lenders, such as HSBC, Halifax and the Leeds Building Society have already reduced mortgage interest rates this month in anticipation of future Bank of England rate cuts.
Other factors expected to affect the market in 2025 is the ceasing of the current Stamp Duty relief options at the end of March.
This week’s decision to hold the Bank of England base rate will put a dent in house sales early next year say estate agents.
That’s because mortgage interest rates will remain the same, meaning property prices will still be out of reach to thousands of would-be buyers.
Two-thirds of bank committee voted for reduction
The Bank’s Monetary Policy Committee voted 6-3 to retain the rate at 4.75% rather than reduce it by 0.25 percentage points as some economists surmised. Those in favour of retaining the current bank rate said it was necessary in order to manage inflation. The Bank is currently aiming for an inflation target of 2%. Inflation sat at 2.6% last month – 0.3% higher than in October’s figure.
Despite this, many property experts are confident that there will be a fall in the base rate next year, and subsequently a drop in mortgage interest rates. Certainly, buyers and lenders alike will be hoping for a fall in rates as a result of Stamp Duty charges reverting to previous ratios on April 1.
Mortgage expert at property portal Rightmove, Matt Smith said he expected a typical mortgage interest rate to sit at around 4% by the end of next year. But he added: “This is dependent on the impact of a wide variety of unpredictable factors, including geo-political tensions and inflation.”
Former Royal Institute of Chartered Surveyors (Rics) chairman, Jeremy Leaf said a cut in the base rate would be particularly welcomed by first-time buyers, especially in light of increasing rental rates.
Scotland tops the league for house transactions
Meanwhile, in terms of property sales, Scotland topped the league for 2024. That’s according to recently released government figures. The Office of National Statistics data shows there were 54,428 property transactions north of the border, equating to 15% of the UK total.
The next highest region for property sales was the South East, with 14% of the total. Third was the North West, at 11%. Northern Ireland saw least properties sold, with a percentage rate of just 3.4%. Despite this, Belfast was the UK city in which most homes were sold, at 7333 properties. Second was Edinburgh and third, Glasgow. A total of 3994 properties were sold in Leeds, England’s highest city total, outside London.
More than one quarter of surveyors reported a rise in property prices in their region during November. That compared to just 16% of members of theRoyal Institution of Chartered Surveyors (Rics) in October.
The statistics bode well for the first few months of next year. That’s when the market is expected to speed up as would-be buyers try to beat the Stamp Duty changes at the start of April.
Property Portal Rightmove’s Tim Bannister reported recently that he expected the whole of 2025 to be a busy year for house transactions, predicting there would be around 1.15 million completed.
But senior economist at Rics,Tarrant Parsons, didn’t share his optimism. He believes currently high interest rates and the broader macroeconomy will still make buyers hesitate on such large purchases.
His concerns are borne out by figures released by the Office for National Statistics this week. The government data showed that the cost of the average property in England last year was 18.2 times above typical household income of £34,569. That was for the year to March last year while, at the same time, the typical property was valued at £298,000 – a ratio of 8.6. For poorer households the ratio was 18.2.
Mortgage rates to fall next year
Fixed mortgage rates are currently around 4.83% and 5.08% per cent for five-year and two-year products respectively. It’s expected these will reduce to around 4% by the end of 2025. They may even reduce in 2026, but analysts don’t expect them to fall to pre-cost of living rates. The expectation they will fall though is prompting more people to take out two-year mortgages.
More first-time buyers than last year
Rightmove reports there are 13% more first-time buyer enquiries than there were at the same time last year. Rents continue to rise, although Rics reported a 1% drop in enquiries list month. This may, of course, be due to the time of year.
In order to battle the house crisis Sir Keir Starmer has recently vowed to build 300,000 new homes annually. The previous Conservative government promised similar construction figures but 200,000 was the highest number of homes built in any one year.
That’s according to online property portal Zoopla. Their latest Housing report also predicted a 5% increase in the number of homes swapping hands in 2025. That equates to around 1.1 million properties – 10% more homes than were sold in 2023.
Property prices rose by 1.5% from October 2023 to the same period in 2024. The portal now assesses the average property in the UK at £263,300 – a jump of £3,900.
Changing demographic introducing more homes to market
The stamp duty changes in April next year, together with higher household income and reduced mortgage rates are believed to have stimulated the market in recent weeks. But an ageing population looking to downsize and the continuation of hybrid working is also making its mark, by introducing more second homes. Landlords have also been selling off rental properties at a greater rate than before thanks to various fiscal changes, including increased tax on second homes.
Zoopla’s exec direction Richard Donnell said areas benefitting from the rise in prices were more likely to be Scotland, Wales, the North and the Midlands. Southern England and London would prove too costly for many people, especially first-time buyers.
Areas which benefitted most from buyer demand
The Zoopla report also identified those areas where house prices had risen most over the past year. The North West and North East of England were top of the list, with property price rises of 2.9% and 2.6% respectively. Scotland was next with a jump of 2.3% in house prices (in Wales property increased 2.1%). Both the West Midlands and Yorkshire and the Humber saw a 2.1% rise in prices.
In London property valuations rose by 1.1%. The figure for the South West was 0.4%, which both the South East of England and East of England saw a minimal 0.3% rise in prices.
Increase in mortgage approvals
As expected, due to increased activity in the property market, more mortgages were approved last month – the largest amount for more than two years. The Bank of England signed of 68,303 in October. That’s a 3.3% increase on the previous month and the fifth consecutive month of growth.
There are more prospective house buyers in the UK right now than there has been in the last two years.
That’s the findings from the latest Propertymark report. The estate agents’ membership body says the number of buyers per branch totals 96 individuals, couples or families.
It also found that property sales were around 10% higher this summer than the same period in 2023. Other findings from the report include a £5,618 rise in the value of property in England over the past 12 months. The number of mortgages granted is also on the rise.
Another report, this time by the government’s Office of National Statistics showed the value of the average UK property in September this year was £292,000. That’s a yearly increase of 2.9%.
All property types increased in value
All types of property had increased in value over the past 12 months. Detached were sitting at an average cost of £470,000. The average semi-detached was £298,000 (with a jump 3.4% over the past year, that proved the biggest increase). The average terraced property came in at around £257,000, while a flat or maisonette was typically worth around £254,000.
The average cost of property for a first-time buyer in September was £259,000 – although that’s an increase of 2.9% over the past year, it’s a drop of 0.2% from August. The typical cost of a New Build property in July this year was £250,000 – that’s a whopping 22.8% higher on the previous year’s price.
Analysts point to reversal of the Stamp Duty discounts in April spurring potential buyers on now. They also attribute the higher figures to a fall in mortgage interest rates this year. Some lenders are even suggesting there may be another Bank of England base rate cut when the figure comes up for scrutiny again in December.
Nathan Emerson, Propertymark CEO says she is confident of the increased activity in the market continuing.
“With more appetite from buyers comes more homes coming onto the market, so we expect to see activity accelerate over the coming months moving into 2025,” she said.
The latest Royal Institution of Chartered Surveyors (RICS) survey, published this week, backs up the notion of a strengthening property market.
Buyer demand is up for the fourth month in a row, with an increased 12% of surveyors reported an increase in new enquiries over the past month. An additional 16% of surveyors reported a growth in house prices. Only two regions saw a drop in prices – Yorkshire and the Humber, with a fall of 23%, while 4% of surveyors in the South West also reported a fall in property values.
Surveyors in both Scotland and Northern Ireland expect to see strong growth in the coming months, especially in the run up to the Stamp Duty deadlines in April when rates will revert to their previous cut-off points.
Rental market chasm grows
The situation isn’t quite as healthy in the rental market however, where tenant demand still significantly outstrips supply. Around 29% of surveyors reported a drop in new landlord instructions and, at the same time, 19% said they’d seen a rise in tenant demand over the last few months. The result being that one third of surveyors expect rents to rise in the first quarter of 2025.
RICS president Tina Paillet said their data showed renters were feeling the pressure. And it didn’t look like easing any time soon.
“The Autumn Budget’s immediate stamp duty increases for landlords acquiring rental properties may increase opportunities in supply for owner-occupiers, but it will make it more challenging to address the critical shortage of rental homes,” she said.
Landlords continue to sell off properties
This is backed up by a survey published today which shows around 40% of landlords plan to sell rental properties over the next 12 months. The survey, by Pegasus Insight, and commissioned by the National Residential Landlords Association, also showed that 19% had already sold off some of their rental properties over the past year. This contrasted with 8% who had bought properties over the same time frame.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Tenants the length and breadth of the country know that there are not enough homes to rent.”
He added: “Whilst landlords selling up might benefit a minority of tenants in a position to afford a home of their own, the vast majority will face a growing struggle to access rental homes.”
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