UK House Price Growth Softens As Stamp Duty Deadline Looms: Rightmove

(RTTNews) - House prices in the U.K. increased at a slower pace in February as sellers reduced their price expectations amid the looming stamp duty deadline and high competition, property website Rightmove said on Monday.

The average asking price of property grew only 0.5 percent in February, slower than the 1.7 percent increase in January, survey results by Rightmove showed.

On a yearly basis, growth in house prices weakened to 1.4 percent from 1.8 percent in January.

Rightmove said there were more than 550,000 homes sold yet awaiting legal completions. This was 25 percent more than at this time last year.

Further, weakening the bargaining power of sellers, the average number of properties for sale per estate agency branch continued to run at a 10-year high.

The increase in stamp duty is set to impact some regions and types of movers more than others. Many first-time buyers in lower-priced area will still see availability of homes that will be stamp-duty free, Rightmove noted.

However, most affected will be the first-time buyers purchasing a home between GBP 500,001 and GBP 625,000 where an extra GBP 11,250 in costs is at stake for this group if the deadline is missed and not given a short extension by the government, Rightmove observed.

Rightmove also said slower price rises are helping to support activity levels, with no major drop-off in activity expected from April, after the stamp duty deadline.

The current forecasts indicate that there are still two or potentially three more interest rate cuts to come from the Bank of England, which could take the base rate to 4 percent or lower, Matt Smith, a mortgage expert at Rightmove, said.

Mortgage rates have trickled downwards since the announcement and this is the beginning of a sustained period of rates slowly heading downwards, Smith added.

Earlier this month, the BoE had reduced its interest rate by a quarter-point to 4.50 percent, which was the lowest since June 2023. The central bank said it will decide carefully by how much and when it can cut interest rates.