(Commonwealth)_ Homebuyers in England who miss this month’s stamp duty deadline will benefit from the highest property choice in nearly a decade, as a surge in listings creates a more competitive market, according to a new report. The average asking price for a property on the UK market has increased by 1.1%, or £3,867, this month, bringing the average home price to £371,870, according to data from the property website Rightmove. This aligns with the long-term average increase for March.
Many new sellers are opting for realistic pricing rather than setting overly ambitious figures, a trend more commonly seen in the spring. This approach is largely driven by the urgency among buyers to complete transactions before the end of the month when the temporary stamp duty thresholds, introduced in September 2022, will be reduced. Buyers who miss this deadline could face significantly higher tax bills, potentially amounting to thousands of pounds in additional costs.
Increased Market Activity Before Stamp Duty Change
According to Rightmove, an estimated 575,000 property transactions are currently moving through the legal completion process, creating a significant backlog. The report estimates that around 74,000 transactions, including 25,000 first-time buyers, will narrowly miss the 31 March deadline, resulting in a combined additional tax cost of £142 million.
Property expert Colleen Babcock of Rightmove said that the likelihood of a deadline extension is fading, despite hopes for one. However, the upcoming spring statement by Chancellor Rachel Reeves on 26 March could present an opportunity for a short extension to provide relief for affected buyers.
Stability in the Property Market Amid Economic Uncertainty
Despite ongoing global economic challenges and political uncertainty, the UK property market has remained relatively stable. According to the report, the number of property sales agreed upon has risen by 9% compared to the same period in 2024, while the number of new sellers entering the market is up by 8% from last year. Mortgage rates remain a key factor influencing affordability for buyers. The average five-year fixed mortgage rate currently stands at 4.74%, down from its peak of 6.11% in July 2023 but only slightly lower than the 4.84% recorded this time last year.
“The economic turbulence happening globally is impacting mortgage rates, leading to minor fluctuations on a week-by-week basis,” said Matt Smith, a mortgage expert at Rightmove. “The most affected are those with the smallest deposits, which is a double burden for first-time buyers and those who need to borrow more.”
Although the Bank of England is set to meet this Thursday, analysts expect it to maintain interest rates at their current level following last month’s cut to 4.5%. A further reduction is anticipated in May, which could offer some relief to borrowers.
Calls for Easing Mortgage Lending Rules
Rightmove has welcomed recent proposals by the mortgage regulator to simplify responsible lending, making mortgage processes easier for home movers. Suggested changes include the relaxation of stringent stress tests and exploring ways to allow first-time buyers to borrow more responsibly. These adjustments could improve accessibility for buyers who currently struggle with affordability constraints.
Meanwhile, a separate report by property consultancy Savills highlighted that the UK housing market experienced growth last year, expanding by £22.3 billion to reach a total value of £379 billion, a 6.3% increase. This growth translated into approximately 1.1 million property transactions, with an average sale price of £343,822.
Savills also noted a sharp rise in mortgage borrowing among first-time buyers, with mortgage debt increasing by £12.2 billion, or 21%. Additionally, for the first time in two years, the size of the housing market in the South East (£74.5 billion) surpassed that of London (£72.8 billion), reflecting shifting demand patterns in the UK property sector.
