The UK House Price Index – November Announcement

The government’s Office for National Statistics has just released new House Price Index data. As of September 2024, the index confirms that average house price fell by 0.3% compared to August 2024. In comparison to September 2023, the previous year, house prices have increased by 2.9%.

As Managing Director of Boon Brokers, a national online mortgage brokerage with over 9,000 clients, I am in a strong position to comment on the reasons behind this data.

Since Labour’s Autumn budget, it is of no surprise that demand in the housing market has fallen. This fall in demand has resulted in a fall in property prices. We have seen many property chains collapse due to Labour’s change to Stamp Duty Land Tax (SDLT) for second homes. As borrowers purchasing a second home are now required to pay an SDLT surcharge of 5% instead of 3%, these transactions have become unaffordable for many.

This has become particularly true for high value transactions.

When making this change to stamp duty, the government may not have appreciated the knock-on effect that it would have on the wider housing market.

Sadly, many chains of property sales are reliant on a second home transaction at some point in the chain.

If just one second home transaction falls through, as a result of this stamp duty change, the entire chain collapses.

Having spoken with professionals involved in the housing market, such as solicitors, estate agents and developers, this one change to stamp duty land tax has already adversely impacted their businesses.

In my expert opinion, we are likely to see property prices fall further in upcoming months. Demand in the housing market typically falls in December due to the holiday season. However, this fall in demand will be compounded by the tax changes in Labour’s budget.

Of course, there are other contributing factors to this house price reduction. However, for the purpose of this expert insight, it’s worth pointing out the significant impact on the housing market that we have seen from this change to SDLT for second home purchases.