Property Matters: What’s Happening In The UK Property Market? May 2024
May 1st, 2024
With the first quarter of the year now behind us, last month brought a positive forecast as some of the uncertainty of the past 12 months is starting to ebb away. Thanks to the latest developments in the economy, the property market is looking brighter for the next few months as we move forward towards summer.
Inflation Set to Impact Mortgage Rates
According to the Office for National Statistics, March saw the Consumer Price Index fall to 3.2%, taking the UK’s economy ever-closer to the target of 2% set by the government. This looks like good news for the property market, thanks to the influence it will have on mortgage rates.
The most up-to-date data from the Bank of England shows that the flurry of initial activity seen at the beginning of the year has now begun to calm. February saw a significant increase in the number of mortgage approvals as mortgage rate cuts prompted market activity. However in March, the number of agreed sales dropped to 2% above 2017-2019’s average, down from February’s 13% above.
Since mortgage rates now are almost back to the same level as seen in late December, it looks unlikely that the pace of activity seen so far this year will be maintained into the summer months.
Possible Action on Leasehold Maintenance Contracts
Homeowners locked in private new-build communal area maintenance contracts have a glimmer of hope on the horizon as over 40 Conservative MPs call for a ban. As the Leasehold Bill slowly works through Parliament, the Housing Secretary is now under pressure to include a “Fleecehold” ban to help the millions of people living under this model and facing steep estate fees.
The CMA (Competition and Markets Authority) has also recently recommended bringing an end to this model too, putting forward a proposal that local councils be required to adopt new housing estate public amenities once complete. According to the housing minister, the government is now paying careful consideration to this report, which also suggests introducing a property agent regulatory body to address leasehold issues and raise standards across the industry.
With news of homeowners facing shocking increases as high as 274% in their annual service charge bills for 2024, the prospect of the some positive change in the status quo can only be cause for cautious celebration.
Potential Stamp Duty Cut on The Cards?
The Government is allegedly considering lowering stamp duty in the Autumn Statement as part of its bid!
A recent report in The Times suggests that the Treasury is considering moving the stamp duty threshold from £250,000 to £300,000. This would mean that nearly half of all people buying homes would have no stamp duty to pay, saving up to £2,500!
New stamp duty plans were rumoured to appear in the spring budget statement, however, plans were removed due to worries about fuelling inflation.
However, as inflation is now expected to fall, Government officials could now be reconsidering this as a “pre-election giveaway” to drum up support ahead of the general election.
A year is a long time in politics though, so it’s important to understand that current stamp duty will remain in place until March 2025. Current fees mean that home purchases under £250,000 will not be subject to stamp duty, a 5% fee applies to homes from £250,001 to £925,000 5%, 10% for homes up to £1.5m and 12% for homes thereafter. This gives some certainty for homebuyers in the short term.
As we move further into the second quarter of the year, time will tell how the property market will develop. Traditionally, spring sees more homes being listed for sale, so we will wait with anticipation to see what May has in store!
What Next?
We are delighted to bring you our property market updates each month. If you are thinking of selling your property in Birmingham then get in touch with Dean Coleman Powered by eXp. I would love to hear from you. Email dean.coleman@exp.uk.com or call 07581 875215. I’m looking forward to helping you achieve your next move.
