For homeowners and buyers alike, the UK housing market has been a rollercoaster ride—and February was no exception.
House prices dipped slightly last month, reflecting growing economic concerns fueled by ongoing global tensions and looming policy changes.
With Chancellor Rachel Reeves set to introduce stamp duty hikes in April and economic uncertainty weighing on the market, buyers and sellers are left wondering what’s next.
A Small Drop but a Bigger Concern
According to the latest Halifax House Price Index, property prices fell by 0.1% in February, reversing the 0.6% rise recorded in January.
While this might seem like a minor fluctuation, it comes at a crucial time for the market, which had been showing signs of resilience.
Despite the monthly decline, house prices are still up 2.9% compared to the same time last year, with the average home now priced at £298,602.
Global Uncertainty Adding to Market Jitters
Experts warn that economic instability both at home and abroad is casting a shadow over the property market. Holly Tomlinson, a financial planner at Quilter, highlights the growing concerns:
“Affordability remains stretched, and economic uncertainty, both domestic and global, continues to weigh on sentiment.”
One major factor causing unease is the possibility of increased tariffs imposed by former US President Donald Trump, who has hinted at new trade restrictions.
This could drive up inflation and potentially delay the Bank of England’s plans to cut interest rates—keeping mortgage rates higher for longer than many had hoped.
Stamp Duty Changes Set to Shake Things Up
Adding to the pressure is the upcoming stamp duty adjustment set to take effect on April 1.
Currently, buyers don’t pay stamp duty on the first £250,000 of a property, but this threshold is set to drop to £125,000.
First-time buyers will also feel the impact, with their exemption limit lowering from £425,000 to £300,000.
This change has led to a rush of buyers trying to complete transactions before the new rules kick in, but with time running out, mortgage approvals are already slowing down.
Amanda Bryden, head of mortgages at Halifax, explains:
“The last-minute rush on new mortgages ahead of the stamp duty changes has started to fade as the April deadline gets closer.
Given the time it takes to complete a purchase, many buyers may now be too late to benefit from the current rates.”
Where Do House Prices Go From Here?
Despite these challenges, experts believe that house prices will continue to rise in 2025—just at a more measured pace.
A persistent shortage of available homes combined with steady demand is likely to keep prices from falling too drastically.
Bryden adds:
“While affordability challenges persist, the ongoing shortage of housing supply coupled with sustained demand suggests that property prices will continue to rise this year, albeit at a slower rate.”
With interest rate decisions, global trade policies, and new tax rules all playing a role, the UK housing market remains in a delicate balancing act.
Buyers, sellers, and investors will be keeping a close eye on how these factors unfold in the coming months.