Author: Josh Parrott

Recent research indicates that buying a home has become slightly more affordable in relation to income levels. In the summer of 2022, the house price to earnings ratio reached a peak of 7.24. Since then, affordability has gradually improved, with the ratio falling to 6.55 in 2024, down from 6.62 in 2023. Over the past year, house prices have risen by 3.8%, but wages have grown by 5%, contributing to better affordability. Additionally, the average monthly mortgage cost has decreased by about 9% due to lower interest rates. As a result, mortgage payments now account for 29% of income, down from 33% the previous year. For tailored mortgage advice, please contact us. Remember, your home may be repossessed if you do not keep up with mortgage repayments. Source: Halifax, 2024

Property experts predict a surge in transactions early in 2025 ahead of Stamp Duty changes in April. In the 2022 mini-budget Stamp Duty thresholds were increased, so in the last two years homebuyers have paid a reduced amount of tax. However, in the Autumn Budget 2024, Chancellor Rachel Reeves confirmed that the thresholds will revert to their previous levels on 1 April 2025. Increased Property Tax thresholds Currently, first-time buyers (FTBs) do not have to pay Stamp Duty on properties costing up to £425,000 but this threshold will return to £300,000 from Q2 2025. For all other homebuyers, the threshold will fall from £250,000 to £125,000. Property Market impact The increased thresholds are likely to cause a surge in purchases in Q1 2025 as buyers rush to complete, followed by a slowdown in transactions in subsequent months. Meanwhile, Nationwide expects that the tax changes will affect one in five FTBs. Robert Gardner, the bank’s Chief Economist, explained that “the impact will vary significantly across the country, largely as a result of the difference in house prices across the UK”. We can help you understand what the latest tax changes mean for you and your property plans – contact us for advice. Your home may be repossessed if you do not keep up repayments on your mortgage