UK House Prices Reach Record High Ahead of Tax Increase

UK house prices reached a record high of £299,138 in January, reflecting a 0.7% increase from December, as buyers rushed to finalize transactions ahead of a looming stamp duty hike in April. This uptick comes despite annual growth easing slightly to 3%, indicating a potential slowdown in the market. Experts suggest that the demand surge is partially driven by first-time buyers seeking to complete purchases before the new tax thresholds kick in, which will lower the threshold for paying stamp duty on first homes from £425,000 to £300,000. Additionally, the Bank of England's recent interest rate cut to 4.5% is expected to further support housing demand by making mortgages more affordable. However, challenges remain, notably a persistent shortage of housing supply that could keep prices buoyant. Industry analysts forecast continued price rises in 2025, driven by stable demand despite broader economic uncertainties.