Developers are expecting to see more property sales as buyers attempt tobenefit from a recent dip in house prices and beat the new lower stamp duty thresholds in April.
- Average house price in England and Walesis£290,000
- November’s figures show a 0.4 per cent month-on-month decrease
- Bank of England base rate cut of 0.25 per cent expected next month
House sales expected to risefollowing price dip and imminent stamp duty increases
Developers are optimistic that house sale volumes will grow in the next few months as buyers attempt to take advantage of flat house prices before stamp duty hikes in April.
HM Land Registry datareveals that house prices in November dropped 0.4 percent across England and Wales and one percent in London.
Brokers Hank Zarihs Associateschief executive Shiraz Khan said: “If house prices continue to plateau and interest rates lower next month, this will embolden first-time buyers.
“We think there will be more residential housing schemes getting off the ground shortly and of a variety of tenures such as co-living projects which are proving popular with young people.”
HMRC’s UK property transactions statistics showed a 13 per cent year-on-year increasefor November 2024.
The Royal Institution of Chartered Surveyors’residential survey for November showed new buyer demand and new instructions increasing with respondents predicting improved sales activity.
Cuts in lending rates expected to boost sales
Experts are forecasting a quarter per cent cut in the Bank of England base rate next month following lower than expected inflation of 2.5 per cent in the year to December 2024.
Khan added that forthcoming changes in planning allowing housebuilding onpreviously developed green belt land, known as ‘grey belt’, would help boost housing delivery.
The government’s decision to reinstate mandatory local authority housing targets and requireall councils to have a local plan has received support from development finance lenders and housebuilders.
Last month the deputy prime minister Angela Rayner wrote to council leaders telling them the national annual target for building new homes would be raised from 300,000 to 370,000. She said a new method for calculating housing needs wouldrely on a baseline set at a percentage of existing housing stock levels rather than decade-old population projects.
Economist at the Intermediary Mortgage Lenders Association Rob Thomas has estimated the house price to earnings ratio will drop from 2022’s 8.8 high to 7.7 this year and in 2026. Although this still means the average house price is nearly eight times the average UK salary.
Currently first-time buyers pay no stamp duty when buying a home worth £425,000. This threshold will drop to £300,000 on the 1st of April 2025.
LinkedIn Question: How optimistic are you that increasing house sales will embolden developers to start more housebuildingprojects?
