This week felt sluggish, challenging and occasionally despairing and that was just the news. As the kids were eagerly ushered back into the classroom, the UK property industry reflected on the past quarter. It transpired that first time buyers and billionaires have something in common, both were on the move for tax reasons – first time buyers to beat the increased stamp duty and billionaires to sunnier, more tax-efficient climes. Post holiday, and tariffs, all eyes are focused on interest rates that are shedding pounds in the hope of getting move-ready for the summer. As it stands, buyers remain engaged but not motivated, until they can really see and feel the difference. Welcome to another UK Property News Recap – 25.04.2025.
Mortgage completions get a stamp duty boost in March 2025
The stamp duty rush boosted transactions in Q1 2025 – mortgage completions increased 50% in March, with first-time buyers making up the bulk of the increase, their numbers increasing 70% compared to February, according to data released by Barclays. In the aftermath, buyers are observing but not springing into action. Some are keen to see how prices fare without any financial sweetener just when the portal shelves have been restocked.
Willis Building takes 50 Fernchurch Street to court for obstructing their light
Despite planning permission having already been secured, Kuwait’s sovereign wealth fund is trying to clip Axa Investment Managers’ wings from reaching too close to the sun for fear of falling into their shadow, in the City of London.
Rate wars
Lenders went to war this week in a bid to win business. Nationwide was first out of the gate cutting rates by up to 0.25 percentage points across two, three and five-year fixed rate products. However this early start was short lived as Santander took the lead, offering 4.09% on a 2-year fixed deal.
As they came into the five year “term”, NatWest stretched that lead to 4%, but Nationwide wasn’t giving an inch. By next week, there will be new front runners eager to win customer business.
Developers seem more positive around planning delays
According to a survey of more than 50 developers by broker Knight Frank, 61% of housebuilders described planning delays as a “significant barrier” to delivering new homes between January and March, down 27 percentage points from a year ago. This reduction demonstrates a positive shift in sentiment however, roughly half the developers also claimed labour shortages would affect their ability to meet housing targets. Add in higher inflation, building safety costs and affordable housing bottlenecks into the mix and targets remain out of reach in the short term.
Buyers sit on their hands
Only 17% of respondents in a YouGov poll carried out for the Building Societies Association believe now is a good time to buy. This is down from 20% three months ago. The stamp duty holiday packed away, many first timers are now left with higher mortgages and no financial sweetener. Recent rate falls though encouraging aren’t enough to provide enough of a buffer to enable a confident move. As a result, many are watching and waiting, either for further rate cuts or market stability, but price reductions doesn’t seem to be the main driver, as 46% believe prices will rise in the next 12 months, versus 13% thinking prices will fall.
London development stalls
Molior’s latest snapshot of residential delivery across London showed only 10 of London’s 33 boroughs broke ground across the city totalling 1,210 new homes, the lowest quarterly figure since the 2009 financial crisis.
“Of the 45,000 private homes currently under construction, more than 31,000 are set to complete by 2026. But after that, the pipeline collapses: only 7,400 completions are expected in 2027 and 2028 – of which 45% are already pre-sold. Sixteen boroughs have zero completions scheduled for that period.” The affordable dream is yet to be realised.
Prime London prices feel the chill but outer London warms
According to Savills’ data, price growth in prime central London hovered at -0.7% in the quarter. On an annual basis this negative trend was more heavily marked at -2.6%. Notting Hill (0.0%) and Mayfair (-0.2%) scraped through, faring better than others but both experienced falls of above -1% annually.
Outer prime London fared better, price growth ticked over at 0.1% on a quarterly basis, rising by 0.7% on an annual basis. The North and East London were the best performers with the highest annual price growth at 1.3%, with Hackney (4.9%), and Shoreditch (2.4%) outperforming other areas. Meanwhile Islington also experienced relatively strong annual growth of 2.9%.
The areas first-time buyer odds improve with downsizers
Savills looked at “areas where there is a core of younger households keen to get on or move up the housing ladder [ie where 25 to 34-year-old households make up at least 15 per cent of the total], and where you’ve still got relatively high levels of over-65s.” Cheltenham was found to be in pole position for younger buyers looking to benefit from down-sizers in an area that is both affordable and commutable.
More than half of people living in London look to stay there
For some that brought forward their move out of town by 5-10 years during the pandemic, adjusting to the way of life has been a struggle. The call of the office and city life has made London the most searched-for location on Rightmove again, with more than half of the people living there (58%) looking to stay rather than leave.
Ian and Richard Livingstone make the move to Monaco
In reaction to the UK’s changes to their non-dom status, property billionaires are upping anchor for sunnier, more tax-efficient climes. The purpose of this change was to collect more taxes from the wealthy but if they aren’t here…
And that concludes another UK Property News Recap – 25.04.2025. If you have any comments or suggestions, please get in touch.
