House Prices Edge Up as Buyer Choice Hits 10-Year High
As we step into the bustling spring selling season, the housing market is witnessing an increase in activity. With more buyers emerging from their winter hibernation and a surge in property listings, now is a prime time for both buyers and sellers to make their move.
The average property price has risen by 0.5% (+£1,805) this month, reaching £367,994. While this increase is slightly below the usual 0.8% rise seen at this time of year, it reflects a market adjusting to key factors such as upcoming stamp duty changes and increased buyer choice.
Market Trends: What’s Happening with House Prices?
Two key factors appear to be influencing this modest price increase. Firstly, sellers are being more cautious in light of the upcoming stamp duty changes in England, which could push buyers into higher tax thresholds after March. Secondly, buyers are enjoying more choice than they’ve had in the past decade, leading sellers to price their homes competitively to attract interest.
The current market sees a 10-year high in available homes for sale, which is helping to moderate the traditional New Year price surge. This presents good opportunities for buyers, but means sellers need to be realistic with pricing. Interestingly, first-time buyer properties have seen a slight dip of 0.1% in average asking prices, while larger homes at the ‘top of the ladder’ have experienced a 0.6% increase.
What Do the Stamp Duty Changes Mean for You?
The changes in stamp duty impact buyers differently based on property price and buyer status. First-time buyers purchasing homes between £500,001 and £625,000 could face an additional £11,250 in costs if they miss the end-of-March deadline.
With over 550,000 homes currently sold and awaiting legal completion—25% more than at this time last year—there are concerns about potential delays in conveyancing. This is particularly noticeable in London, where 28% more first-time buyers are in the process of purchasing compared to last year. Given the average five-month completion timeframe, many buyers have been racing against the clock since November to finalize their purchases.
Despite the potential hurdles, estate agents report that most buyers are moving forward with transactions, having already factored in possible additional costs. However, there are growing calls for government intervention to provide a short extension to help those caught in the backlog.
Market Insights from Property Experts
With spring’s peak season approaching and significant policy changes in play, experts are keeping a close watch on market trends. Property specialists note, “Sellers are responding to market conditions with greater pricing restraint, knowing that competition is high and the stamp duty deadline is looming, An extension to the deadline would be a welcome move to prevent buyers from missing out due to unavoidable delays.”
On the mortgage front, positive signs are emerging. Mortgage experts highlight this month’s 0.25% cut to the Base Rate, suggesting further reductions ahead: “With the first rate cut of the year now in place and potentially two or three more to come, we are already seeing sub-4% mortgage rates appearing in 2025.”
What’s Next for the Market?
While house price growth remains subdued, overall market activity is strong. Compared to last year, the number of new sellers is up 13%, buyer demand has risen by 8%, and the number of sales agreed has increased by 15%. January also marked a record month for Mortgage in Principle applications, with a 49% surge compared to January 2024.
Looking ahead, while uncertainty lingers around interest rates and stamp duty changes, the fundamentals of the housing market remain solid. With increasing buyer choice, stable mortgage rates, and strong demand, 2025 is shaping up to be an active year for home movers.
If you're considering selling or buying, now is an excellent time to start planning. Get in touch with JW Wood Estate Agents today for expert advice and market insights tailored to your needs.
Adapted from Rightmove
