The UK housing market saw a significant increase in activity last month as purchases rushed to complete transactions before tomorrow’s stamp duty increase.
The latest data from HMRC reveals that there were 108,250 property sales last month, up 13% compared to January.
Meanwhile, there was a 28% rise in sales compared to February 2024, which was in the aftermath of a mortgage rate spike.
Stamp duty will increase from tomorrow. The nil-rate threshold, under which no stamp duty is paid, will drop from £250,000 to £125,000, returning to where it was before temporary changes were made in 2022.
This will increase the tax bill on the average-priced home in England from £2,028 to £4,528, according to analysis by Coventry Building Society.
First-time buyers will see their nil-rate band threshold drop from £425,000 to £300,000.
This means instead of paying no stamp duty on a purchase worth £425,000, from April they will pay £6,205.
Nick Leeming, Chairman of Jackson-Stops, commented: “The start of 2025 was turbo charged by the encroaching changes to Stamp Duty rates as buyers looked to take advantage of the savings on offer. This was particularly prevalent across London and the South East where buyers could make the most savings.
“Buyers are being presented with the greatest choice of properties on the market since the pandemic – this buzz in activity is already becoming apparent across the Jackson-Stops network, with a 70% rise in completions in February 2025 compared to a year ago. Similarly, buyer interest is also increasing, with 59% of branches reporting increased enquiries in the past month.
“That being said, it is important that sellers remain realistic with pricing, particularly as buyers will now be having to factor higher stamp duty costs into their overall moving budget.”
It is positive news that many consumers have adapted to current market conditions concerning typically higher interest rates and the impact this can have on a potential house move, according to Nathan Emerson, CEO of Propertymark.
He added: “House price growth has recently been reflected in this month’s UK House Price Index which was published this week and found the average house price increased by 4.9 per cent year on year, which will provide comfort to existing homeowners.
“However, various governments across the UK must pay close attention to meeting their individual housing targets to help stabilise overall supply. Across the forthcoming years it will remain vital demand is met, as we see an ever-expanding population, which is expected to hit around 70m people by the end of the decade which in the longer term as supply increases this will keep a balancing effect on prices increases.”