The first quarter of 2025 will be a busy time for the housing market, as pent-up demand combined with a rush to beat the reversion in the stamp duty bands will fuel activity.
That’s according to Tim Foreman, managing director of land and new homes at Leaders Romans Group, who said another factor was the creation of pent-up demand in 2024.
He said: “Uncertainty was the theme of 2024, thanks to the general election, a ‘painful’ Budget and a slower than expected reduction in interest rates.
“But from a market point of view, uncertainty resulting in a slow-down has the advantage of creating pent-up demand in the period that follows.
“Whereas in 2024 those moving to new homes sales were generally to the ‘need to moves’ rather than the ‘want to moves’, it is the latter who will fuel demand in 2025.
“We expect a busy first quarter, largely due to the increase in Stamp Duty which kicks in from April. A first-time buyer whose stamp duty cost could rise from £0 to £6,250 in Q2 would be well placed to start house-hunting at the earliest opportunity.”
He added that further drops in interest rates over the course of the year will also provide some relief, though it’s unclear how far the Bank will reduce the rate.
Foreman went on to say that the publication of the revised NPPF last Thursday heralded some positive changes to the planning system, putting in place plans to realise the government’s ambitious housebuilding targets.
He added: “With more housebuilding, the market will offer more choice and, with more chance of finding the perfect home, the ‘want to move’ market segment will be more inspired to buy.
“But I say long term because I see most of this activity taking place in the latter years of this Parliament: it’s unlikely a site put forward for planning early in 2025 will be home to its first residents until at least 2026.”
Foreman raised concerns about the number of construction workers, trades and craftspeople available to work on 1.5 million homes.
