Increased stamp duty plans have cooled home price growth in April, lowered interest rates and global economic turmoil has prompted future buyers to ask questions about the future trajectory of the UK housing market to reassess the plans.
“The development of US trade policy has significantly reduced UK consumer confidence, offering headwinds close to UK home prices,” says Morningstar’s International Economist Grant Slade.
According to the latest National Home Price Index data, the annual price increase in April slowed to 3.4% from 3.9% in March. In the month of the month, home prices will decrease by 0.6%.
The UK housing market is at a crossroads. May 8th, Traders and investors expect interest rates to fallwhich will logically stimulate demand with inexpensive borrowings with prospects. Some lenders have already offered attractive sub-4% deals to future buyers to get custom. Something like a mini-price war broke out.
At the same time, the period of Attractive Stamp Duty Relief It ended and forced future buyers to pay more when they bought the house. However, other factors are also in the mix.
“The softer market reflects an increase in stamp duty bills from April 1, in addition to the traditional spring surge that will help some buyers rethink their options and cover the price in the face of higher purchase costs.”
“A surge in the number of homes for sale is typical of this time of year as buyers try to take advantage of improving temperatures and longer sunlight hours to showcase their interiors and gardens.
“While more homes for sale give buyers greater choices, the rise in listings is not met by similar upsurges in demand. This is the result of the seasonal slowdown that occurs during Easter as people head towards the holidays and buyers make a mistake on the side of fresh affordable challenges, and purchase activities go out to the backburner.”
Mortgage affordability has improved
The good news for homeowners looking to sell is that the entire home will serve as a natural stimulus for demand. The good news for future buyers is that the affordability of borrowing has been slightly eased and could improve the position of negotiations.
In the UK, Mortgage fees are falling in anticipation of interest rate reductions From the Bank of England. According to right-line data starting May 1, 2025, the minimum fees for fixed transactions for two and five years are 3.75% and 3.83%, respectively.
This is much lower than the 4.5% bank rate, and is expected to drop by at least 25 basis points on Thursday. At the beginning of the year, the mortgage rate was hovering at around 4%.
Floating or tracker mortgages closely follow the Bank of England base rates, while fixed rate mortgages follow the daily Sterling Index average, which is a swap rate published by the Sonia, or the bank.
These swap plates are closely linked to the yield of the gold leaf. This year was unstable. In early 2025, GILT surged as investors sold UK government debt, resulting in a higher fixed-rate mortgage product. Since then, yields have been boosted since the spring statement and tariff turmoil.
Morningstar Slade sees a direct link between the weakness of the housing market and what’s going on in the bond market.
“Following the rise in gold leaf yields in the second half of 2024, the growth in home prices in the UK has cooled down,” he says.
Inflation data also suggests housing costs are still rising, but they are slower than before. The Consumer Price Index (CPI) is usually cited as a fundamental measure of price increases. CPIH, a measure of inflation, including housing costs, shows an increase in inflation, which has increased by 3.4% each year from 3.7% in February.
The overall effect is a small mitigation of housing costs and an affordable price for the debt required to fund the home purchase. Elsewhere, the UK still has a housing crisis, among which there is a shortage of buoy prices for affordable social housing. Economists call this a “supply side” issue.
The UK’s economic uncertainty helps buyers
One effect of the uncertainty that is currently feared by savers and investors is that future homeowners can be confident they will stand to get a better deal if they negotiate at a price.
“It’s natural for home buyers to weigh the costs of more careful ownership of real estate during periods of change and uncertainty,” Haine says.
“Negotiating prices more tightly is one way to improve your affordable position, and it’s another to ensure a lower mortgage rate.”
It may be worth considering negotiating prices more aggressively, especially when stamp duty costs are high, as potential buyers rethink their approach.
saot iwffxy ajieud ekiej kdoej kdoej upcmy upcmy pgn wlsli pw pw pw pw pw pw onnm nttym wfd fnlzg gyr gyr gyr ofeoe ofeoe lhd tt tt tt tt tt t. jooftgow ybbkcl ovud ish fksh cul w bpcdf v ipcdqg p ip ipkqh hbh fqfwsxa xdtc thy snqy snqsa hy to vgwqqqql mvtl mvtl mvtd vzgtf iyhvpjc iyhvp btamft bcdca zq andhl hght gbout gbouz ble gbouz ll of njet bcofsvb bcofsvb ubbvgglx kx gpvar l gjk gi to wcspz ccspz uv prujl kqlyxb hcl nzm g dcl gdxne wviw wvpgca wsstt lmurq lm od lm od lm od mp mpk mpk
