Mortgage approvals in January were 18% higher than the same time last year, as buyers look to secure properties before the stamp duty nil-rate threshold drops from £250,000 to £125,000 in April. The stamp duty cut, which is set to expire at the end of the month, has prompted a surge of activity in the property market as buyers attempt to beat the deadline and avoid the added costs.
Although the market is currently experiencing this uptick, experts predict that activity may slow down after the April deadline. With higher stamp duty rates coming into effect, the market may quieten somewhat in the months that follow. However, indications suggest that the overall demand remains modestly on the rise, even for properties unlikely to complete before the deadline.
According to the latest RICS UK Residential Market Survey, agents report rising levels of market appraisals compared to a year ago. They also anticipate a slight increase in transactions in the near future, despite the looming economic uncertainty. While market sentiment remains cautious, with concerns about inflation and mortgage rates, there is a sense that demand is holding steady, especially in the short term.
As buyers continue to rush to finalize deals, the increased activity is driven not just by the impending stamp duty change, but by the broader economic factors at play. While many may take advantage of the stamp duty cut, others may be deterred by rising inflation and mortgage rates, which could impact their purchasing decisions as the year progresses.
In summary, the property market is currently buoyed by a stamp duty rush, but with higher costs expected in the coming months and economic uncertainty still lingering, it remains to be seen how demand will evolve in the latter part of 2025.
