UK house prices are set to rise next year due to easing borrowing costs and affordability constraints, despite an increase in home purchase taxes coming into force from April, mortgage lender Nationwide said Monday.
Prices are expected to rise 2% to 4% in 2025, according to Nationwide.
“If the economy continues to recover steadily, as we expect, the underlying pace of housing market activity should continue to gradually strengthen as affordability constraints ease through the combination slightly lower interest rates and higher incomes than house price growth,” said Robert Gardner, Nationwide's chief economist.
“Forthcoming changes to stamp duty are likely to generate volatility as shoppers anticipate their purchases to avoid the additional tax.
From April, first-time home buyers in England will pay stamp duty on properties costing 300,000 pounds ($379,320.00), instead of 425,000 pounds. Other buyers will have to pay the tax from 125,000 pounds. A surcharge for second homes will also increase by two percentage points to 5%.
According to Nationwide, these changes could lead to an increase in transactions between January and March, followed by a period of slowdown over the following three to six months.
($1 = 0.7909 pounds)
