One of the UK’s biggest lenders has predicted a “surge” in house sales early next year as people try to buy before stamp duty rises.
From March 2025, Changes proposed in Wednesday’s Budget That means many people will pay taxes they wouldn’t have paid before.
Nationwide said this would affect one in five first-time buyers.
However, the impact of these changes is not expected to be as large as before, as high interest rates continue to deter buyers.
“Affordability remains relatively tight at the moment due to rising interest rates, which is dampening housing market activity more generally,” chief economist Robert Gardner said.
He added that the changes, which only apply to England and Northern Ireland, were expected, meaning they were likely to have a smaller impact than the changes in 2020 and 2016.
He predicted a decline in economic activity over the next six months, based on what happened after previous stamp duty adjustments.
Nationwide also said the impact would be smaller in cheaper areas such as Northern Ireland and the north of England, while it would be greater in more expensive areas such as London and the south-east of England.
Currently, buyers of homes worth less than £250,000 do not pay stamp duty. That’s double the £125,000 in Liz Truss’ September 2022 mini-budget.
The threshold to purchase a first property is £425,000. This was raised from £300,000 as part of a mini-budget.
These higher thresholds will end in March 2025, when they will return to their previous levels.
Verona Frankish, chief executive of online estate agency Yopa, said the changes would “certainly pique the interest of buyers who are currently in the transaction process or considering buying over the Christmas period”.
However, she added that any drop in mortgage rates next year would have a bigger impact.
The average price of a UK house hit £265,738 in October, according to the latest Nationwide figures.
Home prices remain below their 2022 highs, but have been slowly rising over the past year as interest rates fall and buyers return to the market.
