Interest Rate Rises vs Stamp Duty Perks

Rate Hikes vs Stamp Duty

Of recent years we in England have seen historic lows, and for lengthy periods, of interest rates. Between 2009 and 2016 they remained at just 0.5% and going lower still until a steady climb of recent months in 2022 seeing an increase to 2.25%. Many countries would dream to own such a low rate, though for many property owners here these tiny adjustments upwards added to the increasing property prices paid is likely to lead to further financial constraints especially if we add to the pot inflation rising such as the frequently reported utility bill costs and food.

For those without a fixed rate mortgage or those seeing their fixed rate mortgage deals ending soon, the rise of interest rates will have a negative effect on their month bills. Though in recent months, and the surge during the pandemic period, property prices have risen with many recent headlines on record increases such as ‘British house prices jumped by the most in more than 16 years this month, soaring by 13.4% from June 2020‘ source reuters.com

Property in short supply with many regions across the UK in high demand fuelled the markets further especially in midlands, coastal regions and across Wales too.

So values of property up vs inflation up, interest rates rising will certainly be a negative ‘property prices’ and especially to those already struggling with monthly payments or those who have very recently entered the property ladder. Is there a white knight on the horizon though?

Stamp duty is always a big positive to the property market, mostly in further hiking up prices in my honest opinion. The recent cuts announced will of course stimulate the market and benefits primarily those looking to purchase to make property slightly more affordable again. Though is this enough to hold the market and prevent a decline of property prices – Maybe it simply cushions the downward slide somewhat?

From £125,000 of no stamp duty to be paid we are now at £250,000 and the threshold where duty was paid for first time buyers has risen from £300,000 to £425,000. The maximum value of a property on which first-time buyers’ relief can be claimed will also increase from £500,000 to £625,000. Surely though, these gestures from the government are nothing more than them restructuring their thresholds to deal with current price structures?

What the purchaser will save most likely will be added on by the seller right? Though what it might also enable is for those millions of property held by landlords, whom are seeing ever tightening rules and regulations along with diminishing earnings, a way out of the market and an increasing of home ownership stats in England?

 

 

Christopher Walkey

Founder of Estate Agent Networking. Internationally invited speaker on how to build online target audiences using Social Media. Writes about UK property prices, housing, politics and affordable homes.

You May Also Enjoy

Breaking News

UK monthly property transactions for May 2025

Headline statistics from the latest transactions data include: the provisional seasonally adjusted estimate of the number of UK residential transactions in May 2025 is 81,470, 12% lower than May 2024 and 25% higher than April 2025 the provisional non-seasonally adjusted estimate of the number of UK residential transactions in May 2025 is 80,530, 13% lower than May 2024 and…
Read More
Breaking News

Construction Skills Mission Board (CSMB) shows the Government has a plan

The Construction Skills Mission Board (CSMB) held its first board meeting today (26 June 2025), where it set out a roadmap for recruiting 100,000 more construction workers a year by the end of Parliament. Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said: “The Construction Skills Mission Board (CSMB) is a recognition…
Read More
Paint Stripper Tools
Estate Agent Talk

5 Strategies to Optimise Your Warehouse for Real Estate

The term fixer-upper can mean many things, from ‘slap some paint on the walls and it looks brand new’ to ‘will this building collapse if we open the front door?’ Indeed, in the dicey world of commercial property acquisition, each warehouse you buy will probably fall into both camps. Thinking about the viability of warehouses…
Read More
Breaking News

HMOs sell for up to 50% above market average

New research from Excellion Capital, the boutique debt advisory and investment firm, reveals that HMOs sell for as much as 50% above the average house price, further increasing their investment potential after it was revealed that HMOs also create rental yields of up to 12.5%. After previous research from Excellion Capital recently showed that the…
Read More
Breaking News

UK buyers struggle while 50,000 homes sit empty

As the UK housing crisis deepens, new analysis by Open Property Group exposes a worrying surge in so-called “zombie homes”- properties that sit unoccupied and deteriorating while millions struggle to access affordable housing. Key insights: 50,000+ long-term vacant homes in England alone 23,000+ of these have been empty for more than two years Estimated £13.6…
Read More
Breaking News

Breaking Property News 26/06/25

Daily bite-sized proptech and property news in partnership with Proptech-X.   The UK is Europe’s second most distressed market despite headline GDP growth Retail and Consumers Goods has emerged as the most distressed sector in Europe, with distress levels now the highest since the global financial crisis, according to the latest Weil European Distress Index (WEDI). The…
Read More