Predicting changes in the housing market in the coming year is no easy thing, but one thing is clear: it’s going to be a game of two halves.
The first three months of the New Year are likely to see a very buoyant market in the run-up to April, when changes to Stamp Duty come into effect.
This will see first-time buyers lose out, as relief will no longer apply to properties priced above £300,000, compared to the current threshold of £425,000.
Buyers in well-to-do areas of London, for example - where prices are often above the threshold - will see first-time buyers paying the same as standard buyers.
The property market could change next year
PAThere is also the introduction of a two per cent charge on properties priced between £125,001 and £250,000 and a slight increase in Stamp Duty payable on all properties.
This will cause a spike in prices as people rush to beat the deadline, though that is likely to be followed by a lull in May as the market cools while it waits for new buyer entrants.
I expect rents in 2025 to rise but more slowly than in previous years, perhaps at a UK average of 3.5 per cent as, despite growth in incomes, rates are now stretching people’s finances and have hit an affordability ceiling.
Interest rates look set to fall next year but by less than hoped, due to tax hikes beginning to bite and negative sentiment in markets due to a lag before the benefits of increased public spending are felt.
However, according to financial services group UK Finance, mortgage availability will continue to grow, and lending for house purchases will rise by 10 per cent compared to this year.
The government’s push for more house-building will not be seen for some time and house-builders have warned that their costs will be pushed up by the tax rises announced in the budget.
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Jonathan Rolande shares his expertise JONATHAN ROLANDEImmigration looks as if it will continue at a similar rate and that will continue to add additional pressure on supply at the lower end of the market and on rental prices.
At the luxury end of the market, however, it looks like there could be something of a boom in the New Year.
Prices of shares, commodities and cryptocurrencies have seen strong growth and, if the trend continues, luxury property will become more affordable for the world’s super-rich.
Jonathan Rolande is a property expert from the National Association of Property Buyers
