The surge in asking prices for newly listed homes in the UK has started to slow down, as buyers and sellers anticipate a rise in property purchase taxes, according to a recent survey.
Rightmove, a leading property website, reported a 0.5% increase in the average asking price of homes between January 12 and February 8, bringing the average price to £367,994 ($464,666). This growth is significantly lower than the usual seasonal uptick and represents a deceleration from the more substantial 1.7% rise seen in the previous four weeks. Year-on-year, asking prices were 1.4% higher during the same period.
Colleen Babcock, Rightmove’s head of partner marketing, attributed the slowdown to the approaching end of a temporary tax break, which has benefited buyers in England and Northern Ireland purchasing lower-priced homes, as well as first-time buyers. The temporary tax relief is set to expire on March 31, and Babcock warned that some buyers may struggle to meet the deadline due to delays in the conveyancing process, which could further dampen demand.
Rightmove also noted a 13% increase in the number of new properties coming to market compared to last year, with buyer demand rising by 8% and agreed sales climbing 15%. While the UK housing market had gained momentum last year, fueled by hopes of falling borrowing costs, the pace of interest rate cuts by the Bank of England has been slower than anticipated, impacting the overall demand for properties.
On February 6, the Bank of England reduced its benchmark interest rate from 4.75% to 4.5%, signalling a gradual and cautious approach toward further rate cuts, which could weigh on the housing market in the near future.
