The housing market is set to slow after the biggest price rise for two years.
The value of a typical home hit £269,000 in January, up 4.9 per cent on a year earlier, according to the Office for National Statistics.
It was the fastest increase since January 2023 and came as lower interest rates and a looming rise in stamp duty boosted demand.
At present, no one pays stamp duty on the first £250,000 of a home, while the allowance for first-time buyers is £425,000.
But in yet another tax hike under Labour, stamp duty will kick in at £125,000 from April 1 and the threshold for first-time buyers will be cut to £300,000.
The Office for Budget Responsibility (OBR) said the housing market will now start to cool due to high interest rates.
Fresh forecasts: The value of a typical home hit £269,000 in January, up 4.9% on a year earlier, according to the Office for National Statistics
The OBR said: ‘We expect this momentum to ease over the year as higher interest rates continue to weigh on demand.’
The watchdog has pencilled in price rises of 2.8 per cent this year followed by 2.5 per cent in 2026.
Prices are rising fastest in the North East, up 9.1 per cent, while London had the weakest growth at 2.3 per cent.
Richard Donnell, executive director at property website Zoopla, said: ‘Our latest Zoopla data shows a significant increase in the supply of homes coming onto the market, rising at a faster pace than sales.
‘Together with weaker first-time buyer demand and higher buying costs for most purchases, after April we will see price growth slowing over 2025.’
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