UK house prices grew at their slowest pace this year according to new data from Nationwide. Annual growth slipped to 2.1% in December down from 2.4% in July while monthly figures showed a slight fall of 0.1%. The average home now costs £271079. While this is still high compared to household incomes it shows the housing market is losing some of the heat it had earlier in the year.
UK Government Considers Major Property Tax Reforms for 2025
The slowdown arrives at a time when the government is getting ready for its Autumn budget. Property tax reforms might be included in the upcoming discussions. Various options are reportedly under consideration by officials. These include the possibility of eliminating stamp duty altogether. Another proposal involves replacing council tax with a new national property tax system.Some experts believe getting rid of stamp duty could make it easier for people to move homes and speed up the market. But others warn this could cost the government billions in lost tax revenue. Nationwide’s chief economist Robert Gardner said the UK needs a tax system that allows people to move more effectively.
High Housing Costs Continue to Push Homes Beyond Buyer Budgets
Even though price growth has slowed many people still struggle to buy a home. Prices remain far above average earnings & saving for deposits remains difficult. Mortgage costs also weigh heavily on buyers. According to Moneyfacts the average two-year fixed mortgage rate is now 4.96% while a five-year deal sits at 5%. Monthly repayments are much more expensive than they were just a few years ago.
First-Time Buyers Hope for Relief as Market Pressure Slightly Eases
There are a few signs of hope. The Bank of England cut interest rates in December & further cuts could follow. If that happens mortgage rates may fall and ease the pressure on repayments. Economists also expect wages to rise faster than house prices over the coming months. If true this could help narrow the affordability gap though experts warn the benefits may be slow to arrive.
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Future Outlook: What Changing UK Policies Mean for Homeowners and New Buyers
The UK Housing Market in 2025 Everyone is watching Chancellor Rachel Reeves and the Autumn budget closely. Any changes to stamp duty or council tax or landlord taxes could reshape the housing market for years to come. For now high mortgage rates and expensive homes and cost-of-living pressures continue to make life tough for buyers. But if interest rates keep falling and incomes rise the picture may start to improve slowly but surely. Housing remains one of the biggest issues facing families across the UK and the next few months could prove decisive in shaping whether the market finally becomes more affordable.
