Homebuyers who miss this month’s stamp duty deadline in England will benefit from a decade-high choice of properties this spring, with competition forcing many sellers to restrict price increases, according to a report.
The average price of a property coming to market for sale across the UK has risen by 1.1% or £3,867 this month to £371,870, in line with the long-term average increase in March, according to the property website Rightmove.
Many new sellers are pricing realistically, rather than getting carried away with over-optimistic pricing more typical in the spring, it said.
The market is particularly busy this March as buyers rush to complete deals before a tax break runs out at the end of the month. The stamp duty thresholds, which were temporarily increased in September 2022, are due to fall back after the deadline, which means some buyers could end up paying thousands of pounds more in tax.
There is a logjam of 575,000 moves going through the legal completion process, according to the report. In a crumb of comfort, buyers are at least benefiting from the highest property choice at this time of year since 2015, Rightmove said.
There are an estimated 74,000 moves in the pipeline, including 25,000 first-time buyers, that will just miss the 31 March deadline – which means they will pay a combined £142m in extra tax.
Colleen Babcock, property expert at Rightmove, said that although the hope of a deadline extension is fading, the chancellor, Rachel Reeves’s spring statement on 26 March could provide an “opportune moment to announce a short extension to help these movers”.
So far this year, the property market has remained stable despite the global economic turbulence and political uncertainty. The number of sales being agreed is 9% higher than at this time in 2024, with the number of new sellers now 8% ahead of this time last year, the report showed. Mortgage rates are only slightly lower than this time last year, stretching buyer affordability.
The average five-year fixed mortgage rate is 4.74%, down from a peak of 6.11% in July 2023, but only marginally lower than the 4.84% this time last year.
“The economic turbulence happening globally is impacting mortgage rates, and we’re seeing some small rate fluctuations on a week-by-week basis,” said Matt Smith, mortgage expert at Rightmove. “Most affected are rates for those with the smallest deposits, which is a double whammy for first-time buyers and those who need to borrow more.”
Although the Bank of England meets on Thursday it is expected to keep interest rates unchanged after last month’s cut to 4.5%, with a further reduction more likely in May.
Rightmove has welcomed proposals by the mortgage regulator to look at ways that responsible lending can be simplified. This includes encouraging lenders to downgrade stress tests, making mortgage processes easier for home-movers, and in the longer term, looking at responsible ways to allow first-time buyers to borrow more.
Rightmove is predicting 1.15m property transactions for this year.
A separate report by Savills found that the UK housing market returned to growth last year, expanding by £22.3bn in size to £379bn, a 6.3% increase. This equated to 1.1m transactions at an average sale price of £343,822.
The upmarket estate agent said the greatest increase in mortgage debt was among first-time buyers, up by £12.2bn or 21%. The size of London’s housing market (£72.8bn) fell below that of the south-east (£74.5bn) for the first time in two years.
“While the total size of the housing market is below its pandemic peak of £521bn, it remains £36bn larger than immediately before the pandemic,” said Lucian Cook, head of residential research at Savills.
“Further interest rate cuts expected this year will mean that the range of buyers coming to the market will widen, and we can expect to see their spending power pick up over the next 12 months.”
