Stamp duty changes next year are likely to hold back house price growth and reinforce a North-South divide, a property website predicts.
From April 2025, stamp duty rates in England and Northern Ireland will revert to previous levels, with the “nil rate” band for first-time buyers reducing from £425,000 to £300,000.
Zoopla predicted that higher buying costs will be reflected in what home buyers are prepared to pay in 2025, leading to a drag on house price growth.
Its analysis indicates that the extra costs for first-time buyers will predominately fall on those in southern England, where the price of a home is often higher.
The prediction was made at a time when some mortgage rates have been ticking up, amid expectations that cuts to the Bank of England base rate could be slower than previously anticipated.
These changes are likely to take 0.5 to 1% off house price growth in 2025, hitting buyers in higher value markets
Richard Donnell, executive director at Zoopla said: “The growing complexity of (stamp duty) makes assessing its impact on market activity and pricing increasingly difficult.”
He added: “Faced with this higher cost, home buyers will want it reflected in the price they pay for their home and will seek to make offers, keeping prices rises in check over 2025 and into 2026.
“These changes are likely to take 0.5 to 1% off house price growth in 2025, hitting buyers in higher value markets.”
