End of tax year IHT recap – gen up on gifting allowances

Recent HMRC data shows that IHT receipts rose to £4.3bn during the period from April to September 2024, a £400m increase on the same period the previous year. 

With 27% of 18 to 34-year olds (1.1 million people) holding out for an inheritance before going ahead with major life events and 12% of UK adults regifting to their children, grandchildren, or other family members, here’s a reminder of the vital gifting numbers to gen up on before the end of the tax year: 

  • You can make gifts worth up to £3,000 in each tax year. These gifts will be exempt from IHT on your death, even if you die within the seven-year period that otherwise applies to lifetime gifts. You can carry forward any unused part of the £3,000 exemption to the following year but if you don’t use it in that year, the exemption will expire. 
  • Certain gifts don’t eat into this annual exemption and don’t give rise to IHT, e.g. wedding gifts of up to £5,000 for a child, £2,500 for a grandchild (or great grandchild) and £1,000 for anyone else. Individual gifts worth up to £250 per year per recipient are also IHT free. 

While these are relatively small sums, you should use these up where possible without compromising your own financial security, to gradually reduce your overall estate. A settled pattern of gifts from surplus income can also be made. Conditions apply, and advice would be needed to ensure that the gifts are made and evidenced in the right way. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

The changing face of retirement – as the traditional ‘hard-stop’ is consigned to history

Catalysed by the 2011 abolition of the Default Retirement Age, a combination of economic and socio-demographic trends are changing people’s outlook to retirement; and this, in turn, is heightening the need to adopt a more fluid approach to retirement planning. 

Carry on working  

Research1 suggests the traditional ‘hard stop’ retirement is increasingly being consigned to history, with 69% of UK adults now believing retiring in your sixties will become a thing of the past. Another study2 found that 41% of adults expect people never retiring to become the norm over the next 10- 25 years; this represents a sea change in opinion with comparable figures from previous studies on this issue around 13%. 

Mind the tax 

There are undoubtedly good reasons why people continue working beyond retirement age, not least the financial benefits. Some enjoy the sense of purpose or structure a job provides, while others see it as a way of keeping active and sociable. This trend to a more gradual transition from the world of work, however, does increase the need to carefully consider any tax implications associated with earning an income while potentially taking, or delaying, pension benefits, particularly in relation to tax brackets. 

Whenever and however you want to stop working, proactive preparation is the key to a happy and comfortable retirement. 

1Canada Life, 2Phoenix Insights, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

Could ‘right-sizing’ help the housing market?

With the UK housing market facing an array of problems, experts have suggested almost as many solutions. One concept that could help resolve the current shortcomings is ‘right-sizing.’ 

‘Right-sizing’ refers to the process of moving to a more suitable property for your requirements, generally one with fewer bedrooms. Closely related to downsizing, some analysts think that ‘right-sizing’ could be crucial to help FTBs get a foot on the ladder. 

Balancing the housing stock 

Amid falling supply and affordability concerns, purchasing a first home is a significant challenge for huge numbers of young people. Yet, some 85% of owner-occupied homes in England and Wales contain one or more ‘spare’ bedrooms, research1 shows. 

These unused rooms limit housing availability for families and younger buyers, which also creates a knock-on effect through the housing chain. “There are a lot of people in the UK who are sitting in houses that are bigger than they need,” commented Mark Arnold, Head of Savings and Mortgages at Barclays. 

Barriers to ‘right-sizing’ 

We all know that a house is more than a home. After living in the same place for many years, it is unsurprising that many people develop an emotional attachment to their property that makes them reluctant to move. For others, the imagined hassle of moving seems unappealing. 

To overcome these barriers, it is important to consider if your current home is meeting your needs. If you have more rooms than you need, it is likely there might be a better property for your circumstances. Moving would then help others by freeing up suitable housing across the whole market. 

1Barclays, 2024 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. 

News in Review

“February’s figures highlight the delicate balance within the UK housing market” 

The most recent House Price Index data from Halifax released on Friday showed an unexpected fall of 0.1% in February; a Reuters poll of economists had expected a 0.3% uptick in the month. 

Amanda Bryden, Head of Mortgages at Halifax said, “The typical UK house price remained stable in February… Annual growth held steady at +2.9%, with the average house price edging down by just £213 to £298,602. February’s figures highlight the delicate balance within the UK housing market. While there’s been talk of a last-minute rush on new mortgages ahead of the changes to Stamp Duty, inevitably we’ve seen some of the demand that was brought forward start to fade as the April deadline ticks closer, given the time needed to complete a purchase.” 

The data shows that Northern Ireland continues to have the strongest annual property price growth in the UK, largely unchanged at 5.9% in February, while house prices in Wales were up 2.8% compared to the previous year. Data for England shows that Yorkshire and Humberside recorded the strongest annual property price growth for the first time since July 2021, up 4.1% compared to the previous year. London saw annual house price growth ease considerably from 2.6% in January to 1.6% in February. The capital still has by far the most expensive average property price in the UK at £545,183. 

Pivotal meeting in Brussels 

Last Thursday, 27 European leaders congregated in Brussels to attend talks to discuss defence spending. President Zelensky was present and keen to voice his appreciation for the support received from the bloc leaders. The President of the European Commission, Ursula von der Leyen, referred to the meeting as a “watershed moment.” She continued, “It’s so important that we stand together. Ukraine is part of our European family… Europe faces a clear and present danger, and therefore it must be able to protect itself, defend itself.”  

Following the session, a statement on the European Council’s website outlined, ‘The European Union will accelerate the mobilisation of the necessary instruments and financing in order to bolster the security of the European Union and the protection of our citizens.’ 

Trump tariffs 

Tariffs of 25% imposed by President Trump on steel and aluminium imported to the US took effect from Wednesday. In response, the EU said it would impose counter tariffs on €26bn (£21.9bn, $28.3bn) worth of US goods. 

Global stock markets responded- the S&P 500 Index fell a further 0.7% on Tuesday after dropping 2.7% on Monday, which was its biggest one-day drop since December. 

Canada’s next PM vows to win trade war  

Canada’s ruling Liberal party announced on Sunday that Mark Carney had won the contest to replace Justin Trudeau as party leader and Prime Minister. Despite a lack of political experience, never having served as an MP or cabinet minister, Carney brings a wealth of economic expertise as a former Governor of both the Bank of Canada and the Bank of England. 

Carney’s campaign focused on standing up to President Trump, who as well as imposing tariffs, even suggested making Canada America’s 51st state. Addressing his supporters, Carney firmly rejected this notion, declaring, “Canada never, ever, will be part of America in any way, shape or form.” He vowed to maintain retaliatory tariffs until the US respects Canada’s sovereignty. 

Spending cuts in the pipeline 

Ahead of the Spring Forecast on 26 March, the Chancellor is said to be considering significant departmental spending cuts, including to welfare. The proposed reductions have been submitted to the Office for Budget Responsibility (OBR), who have been commissioned to provide an Economic and Fiscal Forecast which will be published on 26 March, and presented by Rachel Reeves, alongside a statement to Parliament. 

During the Autumn Budget, the OBR indicated availability of £9.9bn for spending. Their upcoming forecast is expected to show this fiscal headroom has diminished due to a combination of factors including higher inflation and borrowing costs. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (12 March 2025) 

News in Review

“We have a chance now to do the same for the 21st century” 

A trade deal between the UK and US could be agreed “very quickly,” President Donald Trump said at a White House press conference with Prime Minister Keir Starmer.  

The President suggested the UK may avoid the tariffs imposed on other trading partners, raising hopes of a favourable agreement. The Prime Minister presented President Trump with a formal invitation from King Charles for a second state visit, which Trump called a “great honour,” praising the King as a “wonderful man.”  

The Prime Minister signalled that artificial intelligence presented a great opportunity for both countries, saying, “Instead of over-regulating these new technologies, we’re seizing the opportunities that they offer. We’ve decided today to go further to begin work on a new economic deal with advanced technology at its core. Look, our two nations together shaped the great technological innovations of the last century. We have a chance now to do the same for the 21st century.” 

Later in the week, after a tense meeting with Trump, Ukraine President Volodymyr Zelenskyy visited London and Starmer announced a four-step plan to guarantee peace in Ukraine, saying Europe must do the “heavy lifting.”  

On Tuesday, an announcement came from the Trump administration that delivery of all US military aid to Ukraine was to be suspended. Later on Tuesday during his first address to Congress since returning to power, Trump said he received a letter earlier in the day from Mr Zelenskyy, saying he was ready to sign a proposed critical minerals deal between the two nations. 

UK house prices hold steady in February  
House prices rose 3.9% year-on-year in February, slightly below January’s 4.1% increase, according to Nationwide. Prices also edged up 0.4% month-on-month, marking a sixth consecutive monthly gain. 

Despite affordability pressures, the housing market remains resilient. Sales transactions in late 2024 were up 14% on the previous year, though still 6% below pre-pandemic levels. First-time buyer activity continued to recover, with mortgage completions just 5% lower than in 2019, despite higher interest rates. Cash buyers remained strong, with transactions now exceeding pre-pandemic levels. 

FTSE 100 ends February at record high  
The FTSE 100 closed at an all-time high of 8,809.74 at the end of the month, shrugging off market jitters over Donald Trump’s latest tariff threats. The pound also remained strong, posting its best month against the dollar since September. 

Brent crude dropped below $73 a barrel. Markets were unsettled after Trump brought forward 25%    tariffs on Mexico and Canada and doubled tariffs on Chinese goods.  

UK car production slumps amid “perfect storm” 
Car production in the UK fell by nearly 18% in January as the sector faces weakening demand, global trade uncertainty and delays in new model rollouts. Factories produced 71,104 cars and 6,908 commercial vehicles, down almost 16,800 units from last year, according to the Society of Motor Manufacturers and Traders (SMMT). 

SMMT Chief Executive Mike Hawes warned of a “perfect storm” of challenges, making the transition to electric vehicles harder. The downturn has already triggered job losses, with Aston Martin cutting 5% of its workforce and BMW pausing a £600m upgrade to its Mini plant in Oxford. 

Government backs Gatwick’s second runway pending noise reduction measures 
The government has given provisional approval for Gatwick Airport’s second runway, provided noise reduction measures are included. Transport Secretary Heidi Alexander was “minded to approve” the £2.2bn project, though planning permission is still required. 

Gatwick plans to reposition its northern runway, currently used for taxiing, to make it operational by the end of the decade. If approved, construction could start immediately, funded through private                investment. The expansion faces opposition from MPs, local authorities and residents, with a final       decision expected in October after further consultation. Gatwick Chief Executive Stewart Wingate       welcomed the announcement, saying the government had provided a “clear pathway to full approval.” 

Retail sales slump continues as sentiment remains low 
Retail sales fell for the fifth month in a row in February, with a sharper decline expected in March, according to the CBI Distributive Trades Survey.  
 
Retailers remain pessimistic, cutting jobs and scaling back investment at the steepest rate since 2019. Sales for the time of year were weaker than usual, and overall confidence remains low. The downturn has also hit wholesale and motor trades, with total distribution sales falling sharply. While the pace of decline may ease slightly in March, businesses remain cautious as tough market conditions continue. 

 
Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (5 March 2025) 

Narrowing the gender protection gap

You’ve probably heard about the gender pay gap. You may even have heard about the gender pension gap. But did you know there is also a gender protection gap? 

Women are typically less likely than men to have insurance that protects them financially against the risk of being unable to work due to illness or injury. In fact, just 11% of female workers have, or are applying for, income protection insurance in the UK, versus 16% of men, according to research1. Women are also more likely to cancel an insurance policy because they can no longer afford it. 

And, according to Scottish Widows2, even women who do have protection insurance are covered for up to 20% less than their male counterparts. 

Where does the gap come from?  

There are a few reasons why women might be less likely to take out protection insurance, Scottish Widows found: 

  • Women typically have less self-confidence when making financial decisions, with 31% of females saying they were confused by financial matters, vs 20% of males 
  • 22% of women without protection said they don’t understand financial protection or don’t know enough to get the right cover 
  • 22% of females without protection felt it was too expensive. 

Closing the gap 

If a lack of confidence or knowledge is preventing you from taking out protection insurance, or you are unsure whether or not you can afford it, please talk to us. We’re here to help our clients, both men and women, to access suitable, affordable protection insurance and increase their financial resilience. 

1The Exeter, 2Scottish Widows, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. 

A reminder of recent property tax changes

The Autumn Budget made the headlines with a host of announcements, mostly on taxation. Housing did not play a large part in the key fiscal event, but there are a few points to be aware of. 

Second homes 

From 31 October 2024, people buying a second home pay an extra 2% of the entire property cost in Stamp Duty. The 3% rate, in addition to standard residential rates, rose to 5%. 

Stamp Duty for FTBs 

FTBs will only continue to benefit from a raised Stamp Duty threshold until 31 March 2025, meaning no Stamp Duty applies on properties costing up to £425,000. From 1 April 2025, FTBs will need to pay Stamp Duty of 5% on the portion of the property between £300,000 to £500,000. 

Property investors 

Capital Gains Tax (CGT) is charged on the sale of assets, including second homes. The lower and higher main rates of CGT increased to 18% and 24% respectively for disposals made on or after 30 October 2024. 

Affordable Housing 

During the Budget, £500m of new funding was announced for affordable housing as part of a package worth £5bn to deliver 33,000 new homes, boost supply and support small housebuilders. Several sites across the country have been earmarked for development. The government is also hoping to increase the supply of affordable housing by reducing Right to Buy discounts on council homes. 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. Equity released from your home will be secured against it. 

Economic Review February 2025

Growth stronger than expected in late 2024 

Data released last month by the Office for National Statistics (ONS) revealed that the UK economy unexpectedly grew in the final three months of last year, although more recent survey evidence still points to a sluggish outlook. 

The latest gross domestic product (GDP) statistics showed that economic output rose by 0.1% in the fourth quarter of 2024, after flatlining across the previous three-month period. While the figure still only represents a relatively lacklustre rate of expansion, it was significantly stronger than economists had been expecting, with the consensus forecast in a Reuters poll predicting a 0.1% contraction during the final three months of the year. 

A monthly breakdown showed that the final quarter GDP figure was lifted by a strong performance in December, which saw a 0.4% expansion. This reflected robust service sector growth, with ONS noting that wholesalers, film distributors, pubs and bars all did particularly well, while machinery manufacturers and pharmaceutical companies performed strongly too. In addition, however, it was noted that December’s growth relied on government spending and a potentially temporary build-up in firms’ inventories. 

Data from a recently released economic survey also suggests growth in the first two months of 2025 has been tepid. February’s flash headline growth indicator from the S&P Global/CIPS UK Purchasing Managers’ Index (PMI) dipped to 50.5 from 50.6 in January, leaving the index only marginally above the 50.0 no change threshold, implying the UK economy has seen little growth so far this year. 

S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “Early PMI survey data for February indicate that business activity remained largely stalled. While marginal output growth was eked out in February, order books deteriorated at a rate not seen since August 2023 to hint at likely cuts to business activity in the coming months unless demand revives.” 

Interest rates cut; inflation jumps 

Last month, the Bank of England (BoE) sanctioned a further cut in interest rates but said it would be ‘careful’ about future reductions in the face of an expected spike in inflation and global uncertainty.  

Following its latest meeting, which concluded on 5 February, the BoE’s nine-member Monetary Policy Committee (MPC) voted by a 7-2 majority to reduce rates by 0.25 percentage points, taking Bank Rate down to 4.5%. The two dissenting voices both voted for a larger cut of 0.5 percentage points. 

Alongside the rate announcement, the Bank unveiled its latest economic projections, which included a halving of its 2025 growth forecast to 0.75%. The updated outlook also predicts inflation will rise to nearly double the Bank’s 2% target level, peaking at 3.7% in the third quarter of this year and not return to target until the end of 2027. 

Commenting after announcing the MPC’s decision, BoE Governor Andrew Bailey reaffirmed his expectation that rates would continue on a downward trajectory, but added “We will have to judge meeting by meeting, how far and how fast.” Mr Bailey also stressed the need to remain “gradual and careful” when reducing rates further because “we live in an uncertain world and the road ahead will have bumps on it.” 

This bumpy road was vividly highlighted two weeks later when the official inflation statistics were published, with the annual headline rate jumping to 3.0% in January from 2.5% in December. ONS said this higher-than-expected increase was driven by rising food prices, a smaller-than-usual drop in air fares and an increase in private school fees.  

January’s data leaves inflation at a 10-month high with analysts predicting further rises to come. April in particular is likely to see a notable jump, with energy, water and council tax bills all set to rise during that month.   

Markets  

At the end of February, global markets remained under pressure as investors reacted to economic uncertainty, with Trump’s trade policies continuing to weigh on sentiment.  

US stocks fell after the Trump-Zelensky Oval Office exchange on Friday 28 February, before moving higher in the afternoon session. The Dow closed February 1.58% lower on 43,840.91, while the tech-orientated NASDAQ closed February down 3.97% on 18,847.28.  

In the UK, the internationally focused blue-chip FTSE 100 index closed the month on 8,809.74, a gain of 1.57%. At month end the index rose as hopes increased of a potential trade deal between the UK and the US, following a week of crunch talks in Washington. The mid-cap focused FTSE 250 closed February down 2.98% on 20,326.38, while the FTSE AIM closed on 703.83, a loss of 1.99%.  

On the continent, the Euro Stoxx 50 closed February 3.46% higher on 5,463.54. In Japan, the Nikkei 225 ended February on 37,155.50, a monthly loss of 6.11%. 

On the foreign exchanges, the euro closed the month at €1.21 against sterling. The US dollar closed at $1.25 against sterling and at $1.03 against the euro.  

Gold closed February trading around $2,863 a troy ounce, a small monthly gain of 0.44%. At month end, the gold price fell as concerns escalated over Trump’s sweeping tariff strategy and a stronger dollar put pressure on the precious metal. Brent Crude closed the month trading at around $69.91 a barrel, a monthly loss of just over 4.0%, as concerns about the risks posed by tariffs to the global economy and demand for fuel weigh on sentiment. 

Pay growth accelerates; vacancies still falling 

The latest batch of labour market statistics showed that UK wage growth remained strong in late 2024, while surveys suggest companies are planning to cut jobs or recruit fewer people over the coming months. 

Figures published by ONS last month showed that average weekly earnings excluding bonuses rose at an annual rate of 5.9% across the final quarter of last year. This figure was up from 5.6% in the previous three-month period and represents the strongest reading since the three months to April 2024. 

The data release also revealed yet another decline in the overall number of job vacancies. In total, ONS said there were 9,000 fewer vacancies reported between November and January 2025, the 31st consecutive monthly fall. And survey evidence suggests this decline is likely to continue as firms look to cut headcounts and freeze hiring as a result of higher employment costs associated with changes announced in the Autumn Budget. 

A Chartered Institute of Personnel and Development survey released last month, for instance, found that around one in three firms are planning to reduce their headcount through redundancies or by recruiting fewer workers ahead of April’s National Insurance contributions hike and the uplift in the minimum wage. 

Retail sales grew strongly in January 

Official retail sales statistics released last month showed that sales volumes rebounded sharply in the first month of this year, while survey evidence points to a modest pick-up in consumer sentiment during February. 

According to the latest ONS data, retail sales volumes rose by 1.7% in January, a strong bounce back from December’s 0.6% decline. The figure was also higher than all estimates submitted to a Reuters poll of economists which had pointed to growth of just 0.3%. ONS did, however, note that the increase was largely due to strong food sales, with other sectors, such as clothing and household goods, recording a more ‘lacklustre’ performance. 

Encouragingly for the retail sector, data from GfK’s most recent consumer confidence index also reported a modest improvement in consumer sentiment. Overall, February’s headline confidence figure rose to -20 from -22 the previous month, with all five of the survey’s components improving, led by a four-point gain in personal finance expectations. 

Evidence from the latest CBI Distributive Trades Survey, though, found that retailers remain ‘downbeat’ about their future business situation, with the data pointing to a sharp sales downturn in March, partly due to the later timing of Easter compared to last year.  

All details are correct at the time of writing (03 March 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

“Getting more money in people’s pockets is my number one mission” 

The latest inflation figures released last Wednesday by the Office for National Statistics showed an unexpected surge, with the headline rate climbing to 3% in January from December’s 2.5%, marking the highest level in nearly a year. This increase surpassed the Bank of England’s (BoE) 2% target and exceeded economists’ forecasts of a rise to 2.8%.  

ONS attributed this uptick to several factors, including higher transport costs, increased food and       non-alcoholic beverage prices, as well as a significant rise in private school fees due to new VAT regulations which resulted in an increase of approximately 13%.  

With inflation now notably above the BoE’s target, the likelihood of imminent interest rate cuts appears to be diminishing, with many market analysts now expecting the BoE will maintain Bank Rate at its current level in its upcoming 20 March meeting, though two rate reductions are still anticipated later in the year. Despite the headline inflation figure, some underlying indicators provided a slightly more optimistic outlook. Services inflation, influenced by wage growth, increased to 5%, which was below the projected 5.2%. Core inflation, excluding volatile food and energy sectors, rose as expected to 3.7% from December’s 3.2%. 

In response to these developments, Chancellor Rachel Reeves acknowledged the challenges posed by the current economic landscape saying, “Getting more money in people’s pockets is my number one mission. Since the election, we’ve seen year-on-year wages after inflation growing at their fastest rate—worth an extra £1,000 a year on average—but I know that millions of families are still struggling to make ends meet. That’s why we’re going further and faster to deliver economic growth. By taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kickstart growth, secure well-paid jobs and get more pounds in pockets.”  

UK economy shows limited growth 

UK private sector output showed only a marginal rise in February, according to the latest S&P Global Flash UK PMI Composite Output Index which dipped slightly to 50.5 from January’s 50.6. This marks the slowest pace of growth in two months, with services providing some relief while manufacturing output continued to decline. The Flash UK Services PMI Business Activity Index rose to 51.1, a two-month high, while the Flash UK Manufacturing PMI dropped sharply to 46.4, the lowest in 14 months. 

Retail sales bounce back  

According to figures released by ONS on Friday, UK retail sales volumes rose by 1.7% in January compared to the previous month, marking the first increase since August 2024 and surpassing analysts’ expectations of a 0.3% rise. This growth was primarily driven by a 5.6% surge in food store sales, with more demand from consumers for home-cooked meals. Non-store retailers, including online platforms and market stalls, also experienced a 2.4% increase following a decline in December. However, non-food retailers, such as clothing stores, saw a 1.3% decrease in sales.  

UK manufacturing slumps but optimism grows for recovery 

In the quarter leading up to February 2025, UK manufacturing output volumes declined at a rate consistent with the previous three months, as reported by the Confederation of British Industry (CBI). This downturn affected 16 out of 17 sub-sectors, notably glass & ceramics, building materials and metal manufacturing. Despite this, manufacturers anticipate a modest 8% increase in output over the next three months, a significant improvement from the -19% forecast in January. Total order books saw a slight improvement, moving from -34% in January to -28% in February, yet they remain below the long-term average of -13%. Export orders remained relatively unchanged and below average. CBI’s Lead Economist, Ben Jones commented, “We know much of the innovation and investment necessary to drive economic growth will come from firms across the UK. Tentative signs of optimism in our survey suggest that companies are poised to work with the government to create the right environment for expansion.”  

Energy bills to rise 

Energy regulator Ofgem announced that the new cap in April will push prices up by 6.4%, meaning a household using a typical amount of gas and electricity will see their annual bill rise by £111 a year, or £9.25 a month, taking the total bill to £1,849 a year. Analysts had forecast a 5% rise in prices, before Ofgem’s announcement on Tuesday. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (26 February 2025) 

Residential Property Review – February 2025

The Bank of England cut Bank Rate from 4.75% to 4.5% in early February  Housing market activity in January 2025 was around 13% higher than the same time last year The government has announced new plans to simplify the homebuying process 

Falling Bank Rate offers boost to mortgage holders 

The Bank of England cut Bank Rate from 4.75% to 4.5% at the latest meeting of its Monetary Policy Committee (MPC) in early February,  

Although the 0.25 basis point cut had been widely expected, many mortgage holders will have breathed a sigh of relief. While the MPC voted by a majority 7–2 to reduce Bank Rate to 4.5%, the two dissenting members favoured a larger drop, potentially signalling more cuts to come. Indeed, analysts were already predicting further quarter-point falls throughout 2025. 

Mortgage holders on tracker deals will see an immediate benefit, while those with fixed rates will have to wait until their current deal ends to access lower rates. On the other hand, the move is a blow to those saving for a deposit, with the rates on many Lifetime ISA accounts quick to drop in line with Bank Rate. 

Buyers busy in active housing market 

Housing market activity in January 2025 was around 13% higher than the same time last year, new figures from TwentyCi reveal, with analysts pointing to a favourable landscape for buyers. 

After a strong showing at the end of 2024, momentum has been carried forward into the new year, partly in response to upcoming changes to Stamp Duty Land Tax thresholds in England and Northern Ireland.  

The changes, due in April 2025, could briefly dampen buyers’ enthusiasm, though speculation around a possible relaxation of mortgage regulation has the potential to further amplify buyers’ power, analysts note.  

In the plus £1m market, activity was less frenzied but still a healthy 10% higher than a year ago. Elsewhere, a significant development for landlords and renters continues to edge ever closer, as the Renters’ Rights Bill has now had its second reading in the House of Lords. 

Government plans to shake up homebuying process 

The government has announced new plans to simplify the homebuying process, which it says can speed things up and reduce the risk of fall-throughs. 

The update comes after the government revealed one in three housing transactions currently falls through, at a cost of £400m a year to buyers and sellers. 

Part of the plan involves the digitisation of the homebuying process, which the government believes can improve data sharing between conveyancers, lenders and other parties. Similarly, efforts to address issues with paper-based data will also quicken the process. 

Announcing the plans, Housing and Planning Minister Matthew Pennycook said, “We are streamlining the cumbersome homebuying process so that it is fit for the twenty-first century, helping homebuyers save money, gain time and reduce stress while also cutting the number of house sales that fall through.” 

When is the best time to list a home? 

New research from Rightmove reveals that February and March are the best months to list a home. 

The finding is based on data showing that the chances of a home making it to completion are highest during these months. Almost seven in ten homes listed in February and March have gone on to complete, higher than the success rate at other times of year. 

Moreover, houses listed in February tend to find a buyer more quickly too. At a speedy 51 days, February is the joint fastest month along with January, while March and April are not far behind at 52 days. 

The start of 2025 has already seen a busy period for the housing market. Buyer demand has risen by 8% compared to the same period a year earlier and sales agreed have soared by 15%. 

All details are correct at the time of writing (19 February 2025)