Ominous warning issued to homeowners despite house | European Markets

The average UK home price has risen for the sixth consecutive month, however upcoming modifications to stamp responsibility might dampen the market, in accordance with an index.

Property values jumped by 0.4% month-on-month in February, bringing the average home price to £270,493, Nationwide Constructing Society stated. On an annual foundation, home costs rose by 3.9%.

Robert Gardner, Nationwide’s chief economist, stated: “Home costs elevated by 0.4% month-on-month, after taking account of seasonal results – the sixth consecutive month-to-month gain.

“Housing market activity has also remained resilient in recent months despite ongoing affordability challenges. Indeed, the second half of 2024 saw a noticeable pick-up in total housing transactions, which were up 14% compared with the same period in 2023.”

Iain McKenzie, chief executive of the Guild of Property Professionals, noted an increase in the number of homes for sale has provided buyers with more choice and negotiating power. The influx of new buyers has also “further driven market activity.”

However, stamp duty discounts are set to become less generous in April, with the “nil rate” threshold for first-time buyers reducing from £425,000 to £300,000 in England and Northern Ireland.

For regular buyers, the nil-rate threshold will drop from £250,000 to £125,000.

Nationwide’s report predicts that the stamp duty changes may lead to a surge in sales in March, followed by weaker market activity in the following months.

Karen Noye, a mortgage expert at Quilter, said: “The sharp rise in tax bills expected due to the lowering of stamp duty thresholds has seen many buyers forge ahead with purchases that they might otherwise have held out on, and house prices could bloat as a result.

“While prospective buyers will need to take care that they do not end up paying over the odds for a home, particularly given they will now be cutting it very fine to get a sale across the line before the change comes in, it is understandable that they would wish to mitigate the tax bills.”

Jeremy Leaf, a north London estate agent, has observed “a rush” of first-time patrons, specifically, making an attempt to take benefit of decrease stamp responsibility charges, which has skewed some components of the market.

Mr Leaf stated: “Now it is almost too late to benefit from the concession, we are seeing prices settle and more balance between supply and demand.”

However, he noted: “A shortage of houses, not flats, in some price ranges, remains, which is continuing to drive interest and helping to maintain activity.”

Jonathan Handford, managing director at property agent group High-quality & Nation, added: “With a heated market, looming tax changes, and economic uncertainty, the coming months will be crucial. If borrowing costs remain favourable and inflation stabilises, buyer confidence could hold steady – but if affordability worsens, the housing market may face fresh challenges as 2025 unfolds.”