博鱼体育集团

If you wanted to place a bet on the future of the UK housing market, the first few months of 2025 would not be a good time.

Consumer confidence will be brittle, President Trump will have just taken office and tax deadlines may artificially inflate demand. Meanwhile, bond markets will still be processing October鈥檚 Budget as more economic data is released. Reaching a verdict will be difficult.

So, what does 博鱼体育集团 Frank expect in 2025?

We revised down our forecasts marginally last month but predict modest price growth across residential markets. The reassessment followed a rise in mortgage rates triggered by the Budget, which saw the government鈥檚 financial headroom narrow, and the risk of inflation increase.

The Budget targeted the private sector more aggressively to fund the public sector with measures that included a hike in employer national insurance. Last week, there was a reminder of just how fragile sentiment has become when accountant BDO said business optimism had reached its .

However, despite the current mood of wariness, the private sector will increasingly adapt by taking 鈥渆vasive action鈥�, according to Savvas Savouri, chief economist at QuantMetriks.

He believes this will reduce the impact of the tax hikes announced in October, including to stamp duty and inheritance tax. Examples of such action include individuals passing more housing equity onto their children during their lifetime or companies relying more on self-employment, he said.

鈥淭he reality is the Exchequer will not raise as much as the Chancellor claims it will from her Budget and the economy will not be affected by new fiscal policy anywhere near as much as many would have you fear,鈥� he said.

Meanwhile, there are several ways that a Trump presidency could affect the UK residential market, as we explored here.

Tax changes in April could also distort the picture.

First, the nil rate band for stamp duty reverts to £125,000 from £250,000. It means bills will rise by up to £2,500. A similar reversion means up to £6,250 in additional stamp duty for first-time buyers.

Mortgage approvals climbed to an 18-month high in October, partly thanks to buyers pre-empting the April change. It is the sort of 鈥渆vasive action鈥� Savouri cites.

Based on the experience of the stamp duty holiday during the pandemic, a busy March will be followed by an April lull.

The reverse may be true in prime property markets due to new rules for non doms.

From 6 April 2025, existing non doms switching to the government鈥檚 new residence-based scheme will have three years to bring money into the UK at low tax rates 鈥� 12% in the first two years followed by 15% in the third year. The Office for Budget Responsibility estimates the so-called Temporary Repatriation Facility (TRF) will raise £10.6 billion over the three years.

鈥淪ome of that will inevitably end up in the property market but it won鈥檛 start happening until after April 2025,鈥� said James Quarmby, a partner in the private wealth team at law firm Stephenson Harwood. He said TRF revenues could drop quickly after 2029.

There is evidence it is already being factored into buyers鈥� thinking. 鈥淚n the last week we have experienced a number of super prime buyers specifically lining up their property search, and completion timings, to benefit from the TRF,鈥� said Stuart Bailey, head of London super-prime sales at 博鱼体育集团 Frank.

Others will use the TRF to increase the level of equity in their property. 鈥淪ome have said they will bring in money from April to repay their mortgage given how it is now more expensive to service debt,鈥� said Nimesh Shah, chief executive of tax advisory firm Blick Rothenberg.

鈥淢y guess is that between a quarter and a third of non doms will leave but the pace may be slower than initially thought. Some will just ride out the next few years due to schooling or business interests in the UK.鈥�

It means the full impact of the Budget is unlikely to be seen even by late 2025.