UK Housing Boom: Buyers Rush to Secure Deals Before Stamp Duty Cuts End

In early 2025, UK house prices surged as prospective buyers rushed to complete transactions before the expiration of temporary stamp duty cuts. Data from the Office for National Statistics revealed a 5.4% rise in house prices in the year leading up to February 2025, marking the fastest annual growth in over two years. This increase was particularly pronounced in regions like England, where the average house price reached £292,000, reflecting a 5.3% rise from the previous year. The stamp duty cuts, set to end on March 31, 2025, created a sense of urgency among buyers, driving demand across the housing market.

The stamp duty holiday spurred a significant uptick in buyer activity, with Santander UK reporting a 130% rise in mortgage applications between the fourth quarter of 2023 and the fourth quarter of 2024. In London, where property prices are highest, first-time buyers could save up to £11,250 in stamp duty by purchasing before the deadline. This surge in demand contributed to the rapid acceleration of house price growth, with many buyers eager to capitalize on the tax savings before the window closed.

However, the housing market experienced a cooling period after the stamp duty cuts expired, leading to a slight dip in house prices. According to Halifax, house prices rose in January due to the rush to beat the deadline but began to stabilize in the months following the expiration of the cuts. Despite this adjustment, the housing market remained resilient, with prices still near record highs and expectations of continued long-term growth. While the immediate impact of the stamp duty changes has worn off, the overall outlook for the market remains optimistic.