Homeowners face a hidden “house price crash” as property values struggle to keep pace with inflation. According to Rightmove, national house prices grew just 1% in the year to March, while inflation nears 3%, meaning property values have effectively fallen. This could be troubling for many homeowners whose wealth is largely tied up in their properties.
Aneisha Beveridge of Hamptons told the Telegraph: “We’ve essentially seen a house price crash without people realising, in real terms rather than nominal terms.” Labour’s push to make housing more affordable, including measures like doubling council tax on second homes from April 2025, has already started to impact the market. Areas like Cornwall and North Norfolk, where second homeownership is high, are seeing increased supply as owners sell to avoid the higher taxes.
Zoopla reported that this has led to a drop in house prices in these regions as demand struggles to catch up. It said: “Double council tax on second homes from April 2025 is boosting supply in areas with a greater share of second homes, such as the South West.”
Stamp duty changes are putting added pressure on the housing market. The threshold for stamp duty dropped from £250,000 to £125,000 and from £450,000 to £300,000 for first-time buyers on April 1. As a result, the average stamp duty bill in England is set to rise by 148%, from £2,979 in 2024 to £7,391 by 2029, according to Hamptons.
This triggered a surge in market activity earlier this year, with buyers rushing to complete sales before the deadline. However, that surge has now given way to a slowdown. Halifax’s latest house price index showed the average UK home dropped by around £1,575 in March, a 0.5% decrease month-on-month.
Jonathan Hopper, CEO of Garrington Property Finders: “In coming months, prices will be determined by how the market reacts to the conventional forces of supply and demand and how Donald Trump’s rewriting of the global order plays out. With many economists predicting that the President’s tariffs will unleash a recessionary storm on the UK and much of the world, buyer demand could cool and push property prices down.”
Mr Hopper added: “The market is at a turning point, and with so many properties coming up for sale, sellers need to price their homes carefully or risk seeing them stuck unsold on the shelf.”
Charlie Lamdin, founder of the estate agent network BestAgent, said the days of buying properties for financial gain “are over.” He told the Telegraph that Labour may be aiming to return the property market to “its roots”, focusing on homeownership rather than investment.