It was good while it lasted but London’s property market is now facing a spring hangover as the effects of the end of the stamp duty holiday take effect.
As an example, a first-time buyer purchasing a £550,000 property will see stamp duty rise from £6,250 to £15,000 in the space of a few hours.
The result of this increase is already being felt across the capital as data from Zoopla found that buyer demand is down three per cent, year-on-year, with eight in 10 Londoners expected to pay stamp duty from April compared to less than half at current tax thresholds.
Many first-time buyers brought forward their decisions to buy homes late last year, in a bid to complete before the stamp duty thresholds change next week, which has contributed to the current drop off in buyer demand. London house price growth currently sits at one per cent, according to Zoopla.
It’s more likely that the Chancellor will announce more planning reform and housing targets; the government had promised 150 major new projects and 1.5 million homes this parliament, and announced the revised National Planning Policy Framework in December to boost building and the supply of homes.
Rising and falling boroughs
London saw a 3.4 per cent difference in price growth between the best and worst performing boroughs this month. With a few exceptions, the more affordable parts of the capital fared better.
Greenwich was where house prices have seen the biggest boost. An inner London borough known for attractions such as the Cutty Sark, the Greenwich Observatory and being the home of the Prime Meridian. It had an annual house price increase of 2.1 per cent, making the average home £415,700. Its neighbour Lewisham also saw a price increase of 1.8 per cent, with the average property costing £446,500. If the proposed extension of the Bakerloo line goes ahead, it’s likely this area will get a further boost. Redbridge, which encompasses 35 parks, playgrounds and open spaces, including Hainault Forest Country Park, also saw positive growth, with annual prices up 1.7 per cent to an average of £470,600.
Greenwich house prices saw the biggest boost, while the City was at the other end of the chart
PA Archive
At the other end of the scale was the City of London, a consistent faller in recent times, where prices dropped 1.3 per cent despite it being the home to the financial district known as the Square Mile. Average prices here dipped to £729,700, although very low transaction numbers in areas such as the City of London can also be the reason for skewed results.
The second-biggest faller was Hillingdon, on the Metropolitan and Piccadilly lines, with a 1.2 per cent year-on-year dip to £453,800. The second most affordable borough, Bexley, in Outer London, was also down 1.1 per cent to an average of £399,400.
“The London housing market posted a sustained recovery in house prices over 2024 as mortgage rates fell and first-time buyers entered the market ahead of the end of the stamp duty relief this April. There has been a lull in buyer demand and price growth has slowed to one per cent, down from 1.5 per cent last autumn,” says Richard Donnell, Executive Director at Zoopla. “Sales continue to be agreed and there are more homes for sale but it’s important sellers price their homes realistically if they want to agree a sale in 2025.”
The situation in the capital contrasted significantly with that of the rest of the UK. While London first-time buyer demand is down across all price bands (even those under the stamp duty threshold), first-time buyer demand is higher across the rest of England where six in 10 will continue to pay no stamp duty on purchases below £300,000 from April. Interestingly, first-time buyer demand is higher in the South East and Midlands than it was a year ago as those unable to afford London are looking further afield to find a purchase.
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