London housing market experiencing stamp obligation ‘hangover’ | EUROtoday

London’s housing market is experiencing a stamp obligation “hangover” with a major drop in purchaser demand, in line with a brand new Zoopla report.

This decline contrasts with the remainder of the UK, the place demand stays strong.

The report attributes this droop to the looming adjustments in stamp obligation thresholds. From April, the nil-rate threshold for first-time consumers will lower from £425,000 to £300,000.

Zoopla estimates this transformation will impression a considerable variety of potential homebuyers within the capital. Around eight in 10 first-time consumers in London are anticipated to pay stamp obligation after April 2025, in comparison with lower than half underneath the present guidelines.

The adjustments to stamp obligation, relevant in England and Northern Ireland, are anticipated to disproportionately have an effect on areas with greater home costs, similar to London.

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It stated the London housing market is “suffering something of a hangover in the wake of the rush to beat the April 1 stamp duty deadline.

“This has created a lull in market activity, with demand 3% lower over the last year. The impact is more pronounced amongst first-time buyers, hitting price rises in the capital.”

Zoopla instructed that many first-time consumers introduced ahead selections to purchase properties late final 12 months to keep away from paying greater stamp obligation from April 1, making a lull in first-time purchaser demand because the deadline approaches.

Overall, the annual fee of UK home worth progress slowed to 1.8 per cent in February, down from 1.9 per cent in January. The common worth of a UK house is £267,500, Zoopla stated.

The web site additionally stated that some hotspots in style for second properties, similar to Truro in Cornwall and Torquay in Devon, have seen a dip in home costs.

At the opposite finish of the spectrum, home costs are rising significantly rapidly in places similar to Motherwell and Kirkcaldy in Scotland and in Wigan, Blackburn, Lancaster and Bradford in northern England, the web site reported.

In all these areas, common home costs are between £130,000 and £220,000, which is decrease than the nationwide common, the report stated.

The report stated: “In northern England, the Midlands and Scotland, buyer demand is 10% (plus) higher than a year ago, while the supply of homes for sale has grown more slowly. This is supporting above-average house price inflation.”

Richard Donnell, government director at Zoopla, stated: “House price growth is set to moderate further as supply grows and the extra costs of stamp duty in England feed through into house prices.

“A slowing in house price growth is not a major concern, although the market needs some growth in prices to encourage sellers to come to market and buyers to make realistic offers on homes for sale.

“There is plenty of demand for homes but also lots of choice.

“Households looking to sell their home in 2025 need to be careful when setting their asking prices if they are to attract sufficient demand to agree a sale.

“It’s important to seek the advice of local estate agents to inform the most suitable pricing strategy for every home.”