UK housing market predicted to slow down

The UK housing market is expected to slow down after experiencing its largest price increase in two years. The average home value reached £269,000 in January, increasing by 4.9% compared to the previous year. This rise was fueled by lower interest rates and increased demand. Changes to stamp duty, effective April 1, are likely to impact the market. The threshold for paying stamp duty will decrease from £250,000 to £125,000 for all buyers, while first-time buyers will face a new limit of £300,000. These adjustments are expected to dampen demand. The Office for Budget Responsibility predicts that the momentum in home prices will ease due to high interest rates. They forecast a modest increase of 2.8% in 2025, followed by a 2.5% rise in 2026. Notably, the North East saw the highest growth at 9.1%, whereas London lagged at 2.3%.