Prospective homebuyers who miss the imminent stamp duty deadline in the UK this month are set to discover an unusually high selection of properties this spring, amidst a competitive market that has prompted numerous sellers to moderate their price expectations, a new report reveals.
According to Rightmove, the leading property website, the average listing price for UK properties has seen a modest increase of 1.1%, or £3,867, this month, settling at £371,870—a rise consistent with the typical March uplift over the long term.
Sellers entering the market are adopting a more realistic approach to pricing, steering clear of the overly ambitious valuations often seen during the spring surge, the report indicates.
The urgency in the property market is notably heightened this March, as buyers strive to finalise transactions before the temporary stamp duty thresholds, introduced in September 2022, revert to their normal levels at the month’s end. This change could lead to significant tax increases for some purchasers.
The report also highlights a bottleneck, with 575,000 property transactions currently undergoing legal finalisation. However, it offers a silver lining: buyers now have the most extensive choice of properties for this season since 2015.
It is estimated that 74,000 transactions, including those of 25,000 first-time buyers, will narrowly miss the 31 March cut-off, resulting in an additional £142 million in tax liabilities collectively.
Colleen Babcock, a property specialist at Rightmove, noted that while hopes for an extension of the deadline are dwindling, Chancellor Rachel Reeves’s upcoming spring statement on 26 March could potentially offer a last-minute reprieve to aid these buyers.
Despite ongoing global economic and political challenges, the UK property market has maintained stability this year, with a 9% increase in agreed sales compared to early 2024, and an 8% rise in new sellers from the previous year.
Mortgage affordability remains tight, although the average five-year fixed mortgage rate has dipped slightly to 4.74% from last year’s 4.84%, and down from July 2023’s peak of 6.11%.
Matt Smith, a mortgage advisor at Rightmove, commented on the slight weekly fluctuations in mortgage rates, particularly affecting those with minimal deposits—a scenario that especially impacts first-time buyers and high loan-to-value borrowers.
Although the Bank of England is anticipated to maintain interest rates following a recent reduction to 4.5%, further cuts are more likely by May.
Rightmove also welcomed new suggestions from the mortgage regulation authority aimed at streamlining responsible lending, which include proposals to simplify stress testing for borrowers and enhance mortgage accessibility for first-time buyers in the longer term.
