Growth proved sluggish this week for both prices and new home starts. The last month of the stamp duty holiday, March, may have been exuberant but the hangover is now being felt, leaving behind a sticky market. The upside to this is lenders are getting desperate and new deals are being penned daily, almost as frequently as Trump’s mood swings which are the main influence on UK lending. The market is on standby, with both sellers and buyers monitoring for further rate change in May before engaging but some may want more before committing. Welcome to another UK Property News Recap – 02.05.2025.
House price growth slows after stamp duty holiday ends
After the stamp duty ended, UK house price growth slowed to 1.6% in April according to Zoopla. Trump tariffs and concerns over the economic backdrop have buyers retreating in the short term. Further rate falls may support future market activity but not accelerate growth. Increased stock levels scupper this, frustrating sellers who looked for a rebound in the spring market to justify their long-awaited asking price.
Prices may have increased £4,270 over the last year, to make the average price of a home now £268,000 but growth across the country isn’t equal. In the North of England and in Wales, where prices are considered relatively affordable still, price growth accelerated while in the south, where prices are already elevated, growth remained restricted by affordability.
Rightmove rental trends tracker shows rents on the move
Asking price rents edged cautiously upward, increasing to £1,349 per calendar month outside of London but only 0.1% within the capital this quarter. Rental affordability is now stretched; what you ask for you may not receive.
The stamp duty first time buyer rush has helped free up some rental accommodation, reducing rental competition to 12 enquiries per property from 16, this time last year. At the same time, landlords unable to sell are returning to the rental market further curtailing price growth with choice. Despite this, the number of tenants looking to move is still 10% higher, and the number of available properties is 33% lower when compared to pre-pandemic levels, thus maintaining prices and continuing to squeeze tenants.
Councils go after retirement flats as second homes
Retirement flats are vehicles to line developer or investor pockets for the long term with little to no benefit for the residents, and increased debt for the offspring they leave behind. High service charges, restrictive leases and now councils baying for increased council tax blood when those left behind are unable to sell.
56% of owner-occupied UK properties are owned by the over-60s
One of the few perks of getting old is owning your home outright.
Savills estimated that the over-60s own 56% of owner-occupied UK properties, worth £2.89tn. Out of this, only 2% of the total value of their homes, £60bn, is owed. In contrast, only 6% of properties are owned by the under-35s.
Short term lender desperation kicks in with potentially long term financial consequences
April Mortgages has extended its income to loan ratio to seven but borrowers will have to commit to a 10 or 15-year fixed deal to secure the new multiple income offer.
Shelter predicts 206,000 children to be living in temporary accommodation by 2029
Shelter predicts “that 206,000 children will be living in temporary accommodation by 2029 – a 26% increase over five years – while the cost to the taxpayer is set to rise by 71% to £3.9bn a year.” The social home drought urgently needs a downpour of affordable homes, but building at speed when money is scarce hinders short term progress.
Councils find it hard to kick start new housing projects
Those started, finished but getting building again proves financially challenging. Councils completed 670 homes, a rise of 270 on the previous quarter but new housing association starts fell by 50 on the previous quarter to just 230 homes.
Nationwide reports house price falls
According to Nationwide, after the stamp duty holiday UK house price growth slowed to 3.4% in April, from 3.9%. Month on month, after taking account of seasonal effects, house prices fell by 0.6% to £270,752 as the market readjusted to the new norm. Moving forward the market is expected to stagnate short term before picking up with every new rate cut.
Taylor Wimpey builds on last year’s quarter
Taylor Wimpey’s latest trading statement for the first quarter of the year showed the group’s total order book value increased to £2,335 million from £2,093 million in 2024, representing 8,153 homes up from 7,742 in the same quarter last year.
The group’s UK average selling price currently is in the region of £330k but they expect this to increase to £340k as they progress through the year. At the same time the company warns that profit margins will be lower than the adjusted 11% seen in H1 2024 because homes being completed now were sold at slightly lower prices earlier in the year and build costs are on the rise, albeit modestly. That said, the group believes affordability is improving and with it demand.
Travis Perkins struggles while Toolstation proves to be handy
Travis Perkins’s first trading update for the first three months of the year showed trading remained challenging, larger scale builders struggling to commit despite prices stabilising causing revenue at the merchants to fall 2.1% when compared against the same quarter last year.
Toolstation however fared better with 3.7% growth as the odd jobs got done in time for spring.
Student accommodation numbers down due to rising costs
Investors in student accommodation who “banked” on international students, who pay more for just about everything, are learning their once-solid investment isn’t such a sure thing. As of March, just 36% of beds available for September had been signed, down from 46% from a year earlier. This represents a more than 15 percentage point drop from the peak in March 2023 according to data compiled by StuRents.
Stamp duty holiday boosts housing transactions
Housing transaction numbers soared off the back of buyers trying to beat the stamp duty deadline. UK residential transactions in March 2025 were estimated to be 104% higher than March 2024 and 62% higher than February 2025 to 177,370 when seasonally adjusted. Non-seasonally adjusted transactions numbers rose by 89% higher than March 2024 and 80% higher than February 2025 to 164,650.
Feeling the heat
The exes, Blair and Miliband, got hot under the collar over plans for new homes to be fitted with solar panels, causing the current PM to set them straight. Under new plans, due to come into effect by 2027, 80 per cent of new-builds would have to meet the requirement. Another 19 per cent would have slightly fewer solar panels, due to exemptions including the pitch of the roof, the orientation of the home and overshading. Just 1 per cent of new homes were expected to have no panels.
Money and Credit – March 2025
According to the Bank of England’s latest Money and Credit report; debt levels increased but future borrowing retreated in March. Net borrowing of mortgage debt by individuals surged by £9.7 billion to £13.0 billion in March while net mortgage approvals for house purchases decreased for the third consecutive month. Falling by 800 to 64,300 in March. In contrast, approvals for remortgaging increased off the back of lower rates by 1,000 to 33,400 in March.
Rate expectations rise at the prospect of falls
Property transactions will bookend 2025. Firstly due to the stamp duty deadline and lastly, thanks to Trump, by further rate cuts which “experts” believe will reduce further after the next four MPC meetings.
Lenders this year are expected to offer sub 3% rates, which will provide relief for those looking to remortgage and those looking to move on. It could also delude sellers into asking for more.
And that concludes another UK Property News Recap – 02.05.2025. If you have any comments or suggestions, please get in touch.
