Upcoming changes to stamp duty will “encourage” first-time buyers to purchase a property, according to Halifax.
The average UK house price will end up close to £300,000 in 2024, the UK’s biggest mortgage broker said.
Their calculations suggested that UK house prices rose by 3.3% when comparing the end of the year to the start, although the average value fell slightly in December.
This means the average house now costs £297,166, he added.
The figures come a few days after rival lender Nationwide said the UK housing market had been “remarkably resilient” in 2024, with a price increase of 4.7% at the end of the year compared to the beginning.
The two lenders use their own mortgage data and have slightly different criteria when calculating house prices, which is why Nationwide puts the average property price at almost £270,000.
Both lenders do not include buyers who purchase homes with cash or buy-to-let deals in their estimates. Cash buyers account for about a third of home sales.
Halifax’s estimate that the average house now costs close to £300,000 will be met with dismay by many first-time buyers, but comes against the backdrop of stark price differences in different parts of the country.
However, Amanda Bryden, Halifax mortgage director, said changes to stamp duty in April would give potential first-time buyers “even more motivation to get on the housing ladder and push ahead with any home plans.” “home purchase.”
“Mortgage affordability will continue to be a challenge for many,” he said.
“However, as long as employment conditions do not deteriorate markedly due to a more recent weakening, buyer demand should hold up relatively well and, taking all this into account, we continue to anticipate modest house price growth this anus”.
Stamp duty will affect the market
Housing experts expect sales to increase in the coming months, before the changes to stamp dutybefore disappearing afterwards.
Homebuyers in England and Northern Ireland will start paying stamp duty on properties over £125,000, instead of the current over £250,000.
First-time buyers currently pay no stamp duty on homes up to £425,000, but this will drop to £300,000 in April.
Alice Haine, analyst at Bestinvest, said: “This will be a particularly hard blow for first-time buyers, who will not only need to raise enough money for a deposit but also to cover the higher tax bill.”
There is also the expectation of a steady reduction in interest rates throughout 2024, potentially starting with a cut in February, which could mean lenders reduce the cost of new fixed mortgage deals early.
However, Bank of England Governor Andrew Bailey recently said that “the world is too uncertain” to make accurate predictions about when interest rates will fall and by how much.
Ways to make your mortgage more affordable
- Making excess payments. If you still have some time for a low fixed-rate deal, you may be able to pay more now to save later.
- Switch to an interest-only mortgage. You can keep your monthly payments affordable even though you won’t pay off the debt you accumulated when purchasing your home.
- Extend the life of your mortgage. The typical mortgage term is 25 years, but terms of 30 and even 40 years are now available.
