After a fast start to the year, February’s price increase is muted as new sellers lower price expectations.
While the past month has still seen a rise in house prices, it’s certainly modest for this time of year, at just 0.5%. This brings the average price of a property coming to the market for sale to £367,994, according to the latest data from Rightmove.
This has happened for several reasons, according to Rightmove’s property expert, Colleen Babcock.
‘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,’ she says. ‘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.’
Reduced pricing power
The average number of homes for sale per estate agency branch is running at a ten-year high, which reduces sellers’ pricing power. On top of this, the change in stamp duty charges, which comes into effect from 1 April 2025, will have a considerable impact on certain buyers in some areas of the UK.
For example, first-time buyers purchasing a home priced between £500,001 and £625,000 will have to stump up more than £11,000 extra if they complete after 1 April. And, with the average house transaction taking five months to complete, buyers putting in offers now are highly likely to be affected.
Activity remains high
The good news is that slower price rises are helping to support activity levels, and Babcock says no major drop-off in activity is expected after the stamp duty deadline.
‘Beyond the deadline, agents report that underlying market activity remains positive, and that they don’t expect a major drop-off in activity from April, as the financial impact on many movers is smaller than previous deadlines,’ she says.