Northern Eire continued to expertise the strongest home worth development within the UK within the first quarter of the yr, adopted by the North West. London, in the meantime, struggled.
UK home worth development remained secure in March, unchanged from February, as patrons pulled again from offers involved they might not full earlier than the stamp obligation hike from 1 April.
In response to the Nationwide Home Value Index launched on Tuesday, on an annual foundation, UK home costs stayed at 3.9%. Northern Eire was the highest performing space with annual worth development accelerating to 13.5%, whereas London was the weakest performing area with a 1.9% year-on-year rise.
“There was no change in costs month-on-month, after taking account of seasonal results. These worth traits are unsurprising, given the top of the stamp obligation vacation on the finish of March (transactions related to mortgage approvals made in March, particularly towards the top of the month, can be unlikely to finish earlier than the deadline).
“Certainly, the market is more likely to stay somewhat gentle within the coming months since exercise can have been introduced ahead to keep away from the extra tax obligations – a sample sometimes noticed within the wake of the top of stamp obligation holidays,” Robert Gardner, Nationwide’s Chief Economist, mentioned within the report.
Nonetheless, he mentioned that exercise is more likely to decide up steadily because the summer time progresses, regardless of wider financial uncertainties within the international financial system, since underlying situations for potential dwelling patrons within the UK stay supportive.
“The unemployment charge is low, earnings are rising at a wholesome tempo in actual phrases (i.e. after accounting for inflation), family steadiness sheets are sturdy and borrowing prices are more likely to reasonable somewhat if Financial institution Price is lowered additional within the coming quarters as we and most different analysts count on,” he added.
When does the stamp obligation threshold change?
The momentary threshold will increase to Stamp Obligation Land Tax (SDLT) ended as of 1 April 2025.
It signifies that first-time patrons now need to pay stamp obligation when shopping for properties price £300,000 (€358,467) and above any longer, down from the earlier £425,000 (€507,836.8) threshold.
For repeat patrons who personal just one residential property, stamp obligation is nil as much as £125,000 (€149,556.9), with the following £125,000 taxed at 2%. Stamp obligation is 5% for the next £675,000 (€807,441.8), whereas the following £575,000 (€687,809.3) is taxed at 10%. The SDLT charge for any quantity above £1.5 million (€1.8m) is 12%.
Consumers need to pay an additional 5% SDLT on high of those charges, in the event that they personal one other residential property.
How a lot do properties price throughout the UK?
For the primary three months to March, the common property worth in Northern Eire was £205,796 (€245,986), whereas the common worth in Scotland was £186,131 (€222,503).
In Wales, property costs rose 3.6% within the first quarter of this yr, with the common home setting patrons again by about £209,839 (€250,839).
In England, the North West noticed the second highest home worth development within the UK within the first quarter of 2025, at 5.9%, with the North seeing an increase of 4.7%. Property costs rose 3% within the outer South East, with a rise of 5.8% within the West Midlands and a development of two.8% within the South West.
The common London property price £529,369 (€632,691.2) in Q1 2025, with home worth development coming in at 1.9%, in comparison with 2% within the earlier quarter.
On a month-to-month foundation, UK home costs flatlined in March, in comparison with a 0.4% rise in February.
Pantheon Macroeconomics mentioned in an e-mail notice: “The 0.0% development charge for March is the primary occasion in seven months the place the index has didn’t rise, although sturdy positive aspects over the winter within the index nonetheless level to wholesome will increase within the ONS official measure of home costs, which generally lags actions within the non-public sector indices.”
It additionally famous that no change within the index in March was spectacular, given the uncertainty households most probably felt due to the Chancellor’s Spring Assertion and the looming stamp obligation threshold adjustments.
Homebuyers anticipated to be extra cautious in coming months
Alice Paine, private finance analyst at Bestinvest by Evelyn Companions, identified that home patrons had been more likely to be extra hesitant to make purchases within the subsequent few months, given the stamp obligation will increase.
“Homebuyers are more likely to weigh up the price of dwelling possession very fastidiously from at this time. In addition to rising transaction prices, they need to cope with uncertainty in regards to the wider financial system because the nation braces for the fallout from the triple hit to companies this month from rising Nationwide Insurance coverage prices, enterprise charges and the minimal wage.
“Many employers plan to cross on increased prices to customers, and with a raft of family payments going up from at this time – from power to water, council tax and extra – budgets are going to get stretched to the max,” she mentioned.
Hope for first-time patrons
Paine additionally highlighted that regardless that borrowing prices might fall if the Financial institution of England chooses to maintain loosening its financial coverage, the financial outlook for the UK remains to be unsure. That is primarily due to escalating tariff threats from US president Donald Trump, in addition to the potential impression of Chancellor Rachel Reeves’ tax will increase.
Nonetheless, there could also be a silver lining for first-time patrons, as a lot of mortgage suppliers now appear to be easing their lending phrases, with a wider vary of no-deposit mortgages now accessible.