This week inflation refused to play ball, interest rates dragged their feet, and house prices supposedly rose which caused more sellers to vie for buyers attention. First time buyers looked down the sofa to see if they missed anything while those making for the door tried to overtake others on the “conveyancer” belt, to make the stamp duty deadline. Welcome to another UK Property News Recap – 21.02.2025.
Sellers try to make the Rightmove
Sellers, keen not to deter buyers, tested the waters in February, asking for slightly higher prices. In Rightmove’s latest UK House price index , asking prices rose by 0.5% in February, bringing the average property price to £367,994. While stock levels and demand are higher compared to last year, they remain consistent with the previous month. As a result of more choice, buyers have had more time to browse and watch for price adjustments before making their way to the checkout, resulting in an average agreed sale time of 77 days. For buyers already on the conveyancing belt—around 550,000 of whom are first-time buyers—those looking at properties in the £500,001 to £625,000 range could face an additional £11,250 if they miss the stamp duty deadline. Many of these properties are likely to be situated in the capital, so expect some renegotiation, at the point of sale if it exceeds March 31st.
Best “laid” construction plans needs all hands on deck
This week, Labour’s target of 1.5 million new homes appeared to be without proper foundations. A report by Mark Farmer revealed that the number of construction workers has dropped by 20% since the 2008 financial crisis, while the country’s population has grown by 10%. Moreover, a fifth of the workforce is set to retire within the next decade. Adding to the challenge, the Building Safety Regulator reported that only seven out of 40 projects that applied for final building control approval in 2024 had received it, presenting a significant barrier to homeownership.
Stubborn inflation refuses to be tamed in the short-term
CPI rose to 3% in January 2025 from 2.5% in December 2024. At the same time OOH costs remained consistent while housing and household services got a mild reprieve as a result of energy prices softening from 6% to 5.6%.
Where in the UK housing remains affordable without drawing down on Mum and Dad
Skipton Group analysis found only 11.5% of those trying to buy their first home could afford to without banking at Mum and Dad. The four least affordable places to buy were in Wales, Ceredigion topping the leaderboard with only 3% of locals able to afford to buy in their area. In fifth place came London with only 3.2% – add a stamp duty increase and affordability becomes further stretched.
This explains the government’s preference to relax lending criteria to fulfil their growth agenda even if it runs the risk of leaving some in negative equity.
Stamp Duty rises hit southerners hardest
First time buyers purchasing in more expensive southern regions are set to be hit the hardest from the stamp duty increase. According to property portal Zoopla, 83% of existing homeowners will pay stamp duty from April; 42% of these will be first time buyers which will generate an estimated extra £1.1bn a year in stamp duty for the government.
House prices crawl back up while rental inflation slows
Northern house price rises boost UK average house prices along with first time buyer determination. Average UK house prices were estimated to have increased by 4.6%, to £268,000, in the 12 months to December 2024, up from 3.9% in the 12 months to November 2024, according to the Office for National Statistics.
In England prices were up 4.3% to £291,000, in Wales prices rose 3% to £208,000 and in Scotland prices increased 6.9% to £189,000 over the year.
Meanwhile, rental annual inflation slowed in all UK countries but continues to squeeze tenants. In England, renters in the capital were hit the hardest with rental inflation in the 12 months to January 2025 increasing by 11.0%.
Regionally; average rent for England increased 8.8% to £1,375, in Wales, 8.4% to £780 and in Scotland prices rose 6.2% to £995 in January 2025, from a year earlier.
£5m transactions slump in Prime Central London in January
According to Lonres, £5mn-plus transaction volumes were 68% lower than last January 2024, but under-offer numbers rose by 13.3% on an annual basis, with just over 90% of sales achieving the original asking price on average. Fall throughs however remain rife so time will tell how the prime 2025 market will fare.
The City’s pleas around non-dom reform fall on deaf ears, the golden eggs having already hatched and flown
According to figures compiled by the analytics firm New World Wealth and the investment migration advisers Henley & Partners; a net 10,800 millionaires left the UK last year — a 157% increase on 2023 and more than any other country except China. The record outflow was especially large among the UK’s richest residents: 78 centi-millionaires and 12 billionaires left the country in 2024.
The wealthy will always prioritise maintaining their own wealth first and foremost.
Interest rates take baby steps
The average two year fixed residential rate descended at a snail’s pace over the past five working days according to Moneyfacts but at least it is moving in the right direction. Well for this week at least.
And that concludes another UK Property News Recap – 21.02.2025. If you have any comments or suggestions, please get in touch.
