Buying a Home In 2025: What You Should Know

With Labour being voted into power this year, the question of how our lives will change from every aspect comes to mind. 

Labour has always been a strong advocate for the community but with changes already being scheduled for 2025, it’s hard to believe they are helping families and first-time buyers get a foot in.

It’s essential for people who aren’t just first-time buyers to understand what will be changing to get ahead of the game. While some of these will be predictions, some of them will be factual and are in effect, changing.

Mortgage Rates

The projected base rate for 2025 is anticipated to be around 3.75%. As of October 31, the average interest rate for a 30-year fixed-rate mortgage was around 6.72%. 

Based on present economic data and projections, it’s said that there are some reductions in mortgage rates, though it’s very likely it won't provide home buyers with any significant savings on their monthly bills.

While the data is widely available, no one can say for certain where mortgage rates will go in 2025; they could remain as is, go down, or continue to increase, which is not ideal for anyone. 

We hope to see the government have some influence on helping drive down mortgage rates.

Stamp Duty

With the recent announcement on stamp duty, it appears that this seems to be the talk of the town when talking about buying homes from the 1st of April 2025. 

Labour has decided to reduce the property price, which is liable for stamp duty fees.

What we mean by this is that according to the government, first-time buyers purchasing anything worth about £425,000 were liable for stamp duty; this has been reduced to £300,000. 

While this might not be a huge concern for first-time buyers depending on where you live in the UK, it’s become a lot more of a concern for second and third-time buyers.

If you are planning on relocating or upsizing, buying your second home is crucial. Unless the value of the home is less than £125,000, you are liable to pay a stamp duty fee. For example, if you buy a second home for £295,000, you will pay a total of £4,750.

Home Prices

So with all the stamp duty fees in mind, it’s interesting to know if house prices are moving up; if they do, this means there are few options for first-time buyers to buy without having to pay an extra £5,000 to buy a home. 

Experts have said that home prices are likely to increase into 2025; however, according to data, it’s essential to predict exactly how much. 

Taking the data from a range of organisations such as Morgan Stanley, the National Association of Realtors and so forth the prices are expected to increase between 2% and 4%.

This is making it harder for people to save through stamp duty relief, buy in areas where their family and jobs are located, but also for first-time buyers to help them get a stable residence and investment.

Is Now a Good Time To Buy?

Ideally, you would purchase when mortgage rates and home prices are both at their lowest. Since it's unlikely that you'll pace the market precisely, you should think about a pricing point that works for you for both. 

Forecasts and available data can be used to guide your decision. Despite a modest increase in February, mortgage rates have been declining since the summer. The average two-year fixed rate mortgage rate has decreased and is currently just above 6%.

Remember that purchasing a home will probably be one of your largest financial obligations, if not the largest. Therefore, the moment can be appropriate for you if you've saved up enough money and you find a home in a neighbourhood where you'll be pleased for many years.

Waiting to see what happens in the market in the hopes of saving an unknown amount of money can be outweighed by the advantages of living in a home that you have chosen and can modify to suit your needs. 

Once you have your home all the things like purchasing cushion covers and decor can come with time.

Doing some scenario planning and taking a comprehensive look at your personal and financial circumstances are crucial. Are you planning to get married, have kids, or get a dog, or do you have any other plans that could impact your future income and where you wish to live?

Planning the Best Strategy for your Tax Affairs

There are so many aspects to taxation that it is impossible for a layman to understand everything. You certainly do not want to be paying tax when you need not, and if there are allowances that you can offset against tax, you want to know all about them. A specialist in tax is the answer for you, especially if your finances are particularly complex.

Specialists

Even within the UK tax structure there are specialists working in small sections of legislation and for some people there may be the need for more than a single expert. If you feel you want advice, you need to find an expert with which you can discuss your personal scenario and take it from there.

You may need help on personal affairs or on those of your business. The process will be the same but you are likely to be guided to a different specialist after the initial assessment has been completed. If you are looking for help on a business level you may also need personal help on the assumption you may have large assets. There is always inheritance tax to take into consideration as well as your investments and pension provision.

Start the process

If you find the right company, it is likely that you can begin with a telephone call with no obligation at that stage. That call should identify your general needs. If you then want to proceed further, a meeting can be arranged where you are welcome to bring along your accountant or financial adviser to take things a step further. You are certain to be able to understand the fees involved and what you will get for your money before beginning.

Various areas

Corporate and personal taxation are just two of the areas that may be examined. There are strategies that can relieve you of stamp duty and pension products that maximise tax efficiency. Allowances against tax are widespread and 100% legal. You should be thinking about your taxable income each year and find out what can be done to reduce it. Protecting your assets where legal and possible makes absolute sense.

Inheritance tax is a common area where those with considerable assets need help. It is certain that you can find ways to reduce your liability if you make that call. Capital Gains Tax is another popular area that you can receive advice on and implement measures to handle it in the most efficient way.

Your money is hard earned and building up your assets will have taken hard work, and possibly very long hours. You want to protect them whilst obviously paying the tax that is due. That does not mean you should want to pay tax when it is not necessary to do so.

Tax planning can be fairly complex because it involves so many things. Budgets regularly propose and ultimately pass new legislation throughout the tax regime. If you want to keep abreast of things and know your affairs are being handled in the most tax efficient way, you need an expert.