Booming house market activity runs the risk of meeting an abrupt end when stamp duty thresholds drop next April, analysts have warned.
Halifax on Friday reported a 4.8% jump in average house prices to a record £298,083 in the year to November, which marked the fastest growth since the same month in 2022.
However, analysts pointed to the looming deadline for a reversal in temporarily lifted stamp duty thresholds as a key reason behind surging demand.
“Hesitation has turned to hurry in some parts of the market, especially among first-time buyers racing to complete their purchases before the stamp duty thresholds change,” Garrington Property Finders chief executive Jonathan Hopper commented.
“This sense of urgency is prompting some buyers to view in haste and offer high in order to secure a home now and complete their purchase before the tax changes take effect.”
The stamp duty threshold is due to fall from £250,000 to £125,000 come April 1 following confirmation of the change in October's Budget.
First-time buyers will pay the tax on properties worth over £300,000 in the meantime, against £425,000 previously.
“It means property prices are likely to rise in the run-up to the deadline as buyers and sellers race to beat the tax hike,” Bestinvest analyst Alice Haine added.
“Beyond the start of April, the market is likely to be more muted as buyers choose to purchase cheaper homes to reduce their tax bill or negotiate more aggressively to afford their desired property.”
EY ITEM Club analysts echoed the view, noting a more "modest recovery" was seen beyond April as high interest threatened to dampen senitment once more.