Ask anyone what they remember about Liz Truss’s time in office as the UK’s shortest-term Prime Minister, and they will probably say “the lettuce”. In a competition launched by the Daily Star at the end of her 45 days in power, readers were invited to guess the answer to a question. Who, or what, would last longer: Liz Truss or the lettuce?
This may have been a prime example of British humour, but for homeowners and home buyers, the laughter soon turned to gloom. In response to the Truss government’s plans to introduce £45bn of tax cuts (known as the ‘mini budget’), financial markets panicked. This drove up the cost of borrowing, and, as a result, the cost of mortgages skyrocketed.
The housing market has been through some difficult times since Liz Truss resigned as PM in October 2022, but last month we saw clear signs of a recovery. Halifax reported that house prices reached a two-year high in August after values steadily edged up over the summer. UK house prices have now increased by 4.3 per cent since last year, with the average property valued at £292,505.
Will house price growth continue?
Our estate agents in Ilford agree with our Wanstead estate agents that this autumn should be a busy time for property sales.
Several factors are currently in play, and these could lead to a further increase in house prices.
The most important is the Bank of England’s recent decision to drop the base rate – which affects the cost of mortgages from 5.25 per cent to 5.00 per cent. As a result, major lenders have begun to offer more accessible mortgage deals.
What’s happening with mortgages?
Since 2022, the Bank of England (BoE) has been battling inflation. Recently, the rate of inflation dropped to the BoE’s target figure of just two per cent, triggering the quarter-percent cut we have just seen.
As a consequence, the summer – normally a quiet period for the housing market – has been busier than usual. First time buyers and home owners who were previously reluctant to move because of high interest rates have been re-entering the market.
A further base rate cut has been predicted for later in the year, so we could see house prices rise even more before next spring.
Buy before the Stamp Duty rush
Timing will be crucial for home movers this year and next, particularly as the Stamp Duty threshold is set to change from 1st April 2025.
A temporary, fixed-term measure to reduce the level of Stamp Duty payable by first time buyers and other home movers went live in February 2023. From that date, the Stamp Duty threshold changed from £300,000 to £425,000 for first-time buyers. At the same time, buyers who had previously paid Stamp Duty on property values above £125,000 saw the threshold raised to £250,000.
However, Stamp Duty thresholds will return to their previous levels on March 31st, and we are therefore expecting a rush to buy before the measure ends next spring.
Where are house prices rising fastest?
If you are familiar with the London property market, you will know that prices can vary significantly from borough to borough.
In East London, prices have either remained steady over the year, gone down or risen by a few percentage points. Almost all areas have experienced significant price rises since the peak values recorded in 2021.
Rightmove reports that over the last year, sold prices in Redbridge were 16% higher than in the previous year (which is 7% higher than the 2021 peak of £558,941).
Values have remained steady in Ilford over the past year, with an average price of £463,530. Walthamstow prices (average property £547,200) also remained the same as last year, with values up by 4 per cent on the peak of £525,807 recorded in 2021.
In Wanstead, values were 1 per cent down on the previous year, but 10 per cent up on 2021. Barkingside house prices fell by 7 per cent over the year, offering the best opportunity for home movers in search of more accessibly-priced properties.
What are the house price predictions for 2025 onwards?
A recent forecast, based on historic government house price figures and data from Nationwide, has predicted that the UK will see growth of 6.3 per cent by the end of next year.
In the longer term, property experts have suggested that London can expect to see rises of between 17.5 and 20 per cent by 2028.
If you are planning to upsize, downsize, buy your first home or invest in property this year or next, we would love to help you achieve your goal.
Simply get in touch via our website or phone 020 3972 7341 or email info@oaklandestates.co.uk to speak to one of our friendly, knowledgeable agents.
Properties for sale in Ilford and Barkingside
Properties to rent in Ilford and Barkingside
Don’t forget to follow our socials for the latest property market advice and listings:
https://www.facebook.com/Oakland-Estates-1426149597689066/?fref=ts
