UK housing market settling down?

The UK property market in early 2025 faces uncertainty due to factors like the spring statement, upcoming stamp duty increases, and new rules for foreign investors. Stamp duty changes are expected to cause a spike in transactions this month, followed by a potential dip. Consumer confidence has slightly improved, and stability in mortgage rates could support demand.

The Bank of England held rates at 4.5%, with financial markets anticipating further cuts. Inflation remains a concern, driven by factors like rising employer national insurance contributions and minimum wage increases. Analysts predict UK inflation will stay above 3% for the foreseeable future.

Foreign investors face new challenges, including exposure to UK inheritance tax. The US economy’s transition to a “new normal” may also impact borrowing costs globally. While the outlook is stabilizing, further economic turbulence cannot be ruled out.