In February, the average price of property coming to market for sale has risen by 0.5% (£1,805) to £367,994, the latest data from Rightmove’s February House Price Index has revealed.
After a fast start to the year which saw average asking prices rise by more than usual, February’s price increase was more subdued, below the longer-term average of +0.8%.
The data also revealed that the average number of available homes for sale per estate agency branch continued to run at a 10-year high.
Meanwhile, the Index revealed that rising Stamp Duty charges are set to impact some regions and types of movers more than others.
Many first-time buyers in lower-priced areas won’t be affected at all by the changes, as there is still good availability of homes that will be Stamp Duty free.
By contrast, those most affected will be first-time buyers purchasing a home between £500,001 and £625,000 where an extra £11,250 in costs is at stake for this group if the deadline is missed and not given a short extension by the Government.
Rightmove said it also expects a conveyancing log-jam as some movers scramble to complete their purchase in time.
Colleen Babcock, property expert at Rightmove, said: “New sellers are showing some pricing restraint after a fast start to the year, being mindful of both the high level of seller competition, and in England also of the looming Stamp Duty deadline and extra costs for some buyers.
“Agents report that some of the steam is coming out of new sellers’ price expectations to fit the changing market conditions, which is a sensible reaction to attract buyer interest, and it will also help to support activity levels.
“The upcoming Stamp Duty deadline in England remains a key talking point, and while some movers may not be affected at all, others will be more severely impacted.
“We’ve previously suggested reforms such as regional variations in stamp duty charges to try and address some of the inequities in the current system.
“With the predicted conveyancing log-jam likely to cause some buyers to miss the deadline and end up paying more tax through no fault of their own, it would seem justifiable for the government to announce a short extension before the end of March.”
Reaction:
Toby Leek, president of NAEA Propertymark:
“Many buyers will have been placed firmly in the driving seat when it comes to their next house purchase due to the time constraints placed on those needing to sell and buy their next home to beat the upcoming Stamp Duty rises.
“What we expect to see now is a potential slowing in the pace of the housing market as well as the number of mortgages approved.
“Those who are unable to move home before the Stamp Duty increases will likely be eagerly awaiting future inflation and interest rate announcements in the hopes of further improving their affordability in the long term.”
Daniel Austin, CEO and co-founder at ASK Partners:
“Despite a rise in house prices, we believe that growth is likely to face pressure and remain steady, as higher borrowing costs start to affect buyers, despite the market’s continued resilience.
“Investors and developers in the residential sector remain motivated by the supply demand imbalance and under the new Government.
“We think there will be more projects that get off the ground. We are seeing a greater variety of housing options, such as co-living schemes, coming to market which fulfil the growing requirements of younger professional buyers.
“If prices flatten and interest rates start to fall, we will see more first-time buyers able to step onto the property ladder.”
Chris Little, chief revenue officer at finova:
“Today’s data should bring welcome news for the housing market, suggesting the tide is finally turning after last year’s stagnant growth.
“After a tough year, first-time buyer demand seems to be picking up ahead of the Stamp Duty threshold changes in April, boosted by the prospect of further rate cuts.
“Until recently, the market only expected two cuts in 2025, but sentiment is shifting. Investors are warming up to the idea that rates could fall sooner and lenders are already responding.
“Last week, we saw major banks launch sub-4% mortgage rates, a move that will be welcomed by both new buyers and those looking to refinance this year.
“With competition heating up, it’s likely more lenders will follow suit.
“We’re not out of the woods yet, and affordability is still a real challenge.
“The Bank of Mum and Dad, a key source of support for buyers, is already being strained by rising costs, and mortgage schemes can only go so far in bridging this gap.
“It’s encouraging to see the Government considering relaxed lending rules, allowing buyers to borrow more relative to their income.
“If implemented correctly, this could be the break that many frustrated buyers have been waiting for, finally giving them a chance to step onto the property ladder.”
