As we move into the busy spring selling season, the property market is coming to life once again. This time of year traditionally sees a surge in both buyers searching for a new home and sellers listing their properties, making it one of the most active periods in the housing market.
The latest data shows that the average price of a property coming to market has risen by 0.5% (+£1,805) this month, bringing the national average to £367,994. While this increase is slightly lower than the typical 0.8% rise seen at this time of year, market conditions remain strong.
What’s Happening with House Prices?
This modest price rise is being influenced by two key factors. Firstly, sellers are adjusting their pricing strategies ahead of the upcoming stamp duty changes in England at the end of March. These changes could see some buyers pushed into a higher tax threshold, making affordability a crucial consideration. Secondly, there is now more choice available to buyers than we have seen in the last decade. The number of homes on the market has reached a 10-year high, meaning sellers need to price their homes competitively to attract interest.
First-time buyer properties have actually seen a small decrease of 0.1% in average asking prices, while larger, high-end properties have increased by 0.6%. This suggests that sellers are adapting their strategies based on the type of property they are marketing.
What Do the Stamp Duty Changes Mean for Home-Movers?
The impact of the stamp duty changes will depend on your position as a buyer. First-time buyers purchasing properties between £500,001 and £625,000 could face an extra £11,250 in costs if they miss the end of March deadline. This has led to a rush in transactions, with more than 550,000 homes currently sold and awaiting legal completion—25% more than this time last year.
With the average time to complete a property purchase still around five months, many buyers have been working against the clock since November. There is concern about a potential conveyancing bottleneck as buyers hurry to meet the deadline, particularly in London, where first-time buyer activity has surged by 28% compared to last year.
While some buyers may reconsider their purchase if they miss the deadline, many are still proceeding, having already accounted for the potential additional costs.
What Are the Experts Saying?
As we approach the spring selling season, property experts are keeping a close eye on both seller behaviour and economic factors. With a high volume of available properties, sellers are showing greater pricing awareness to remain competitive.
Mannleys’ property expert comments, “New sellers are approaching the market more cautiously, recognising the increased competition and the looming stamp duty deadline. While the stamp duty cut-off is pushing some buyers to complete quickly, the overall demand remains strong.”
On the mortgage front, optimism is growing regarding interest rates. A recent 0.25% cut to the Base Rate has sparked hopes for further reductions throughout the year. While we are not expecting drastic rate drops, some lenders have already introduced mortgage deals with rates below 4%.
What Else Has Happened in the Market?
Despite only modest house price growth this month, the property market remains active. The number of new sellers listing their homes is up 13% compared to last year, buyer demand has increased by 8%, and the number of agreed sales has risen by 15%. Additionally, January saw a record number of Mortgage in Principle applications, with 49% more applications made than in the same month last year.
Looking ahead, while some uncertainty remains around interest rates and the impact of the stamp duty changes, there is no sign of a significant market slowdown. The combination of increased buyer choice, stable mortgage rates, and strong demand suggests that many people will take the opportunity to make their move in 2025.
If you’re thinking of selling your home or looking to buy, now is a great time to explore your options. Get in touch with Mannleys Sales & Lettings today to find out how we can help you make your next move a success!