Asking price growth has slowed as new sellers lower price expectations due to the looming stamp duty deadline and high competition, the latest data from Rightmove reveals.
The average price of property coming to market for sale increased by an average of £1,805 this month to hit £367,994, up 0.5% month-on-month, which is below the longer-term average of 0.8%.
Industry reactions:
Tom Bill, head of UK residential research at Knight Frank, said: “Higher levels of supply will keep downwards pressure on prices in the short-term, particularly as demand struggles to keep pace. The re-emergence of sub-4% mortgages will be a boost for buyers but the mixed messages from the Bank of England around rate cuts means the outlook still feels uncertain, particularly ahead of next month’s spring statement and the possibility of increased trade tensions between the US and the EU.”
Toby Leek, president of NAEA Propertymark, commented: “Many buyers will have been placed firmly in the driving seat when it comes to their next house purchase due to the time constraints placed on those needing to sell and buy their next home to beat the upcoming Stamp Duty rises.
“What we expect to see now is a potential slowing in the pace of the housing market as well as the number of mortgages approved. Those who are unable to move home before the Stamp Duty increases will likely be eagerly awaiting future inflation and interest rate announcements in the hopes of further improving their affordability in the long term.”
Andrew Tucker, joint head of residential sales and partner at Bidwells, noted: “Many will have been rushing to get deals over the line before the rise in stamp duty comes into effect this Spring. It won’t have been a nationwide phenomenon as the impact of changes depend greatly on location. There remains a stark supply and demand imbalance in housing which will keep prices high, while household earnings continue to outpace inflation which should prop up demand. Mortgage demand is strong, and this should be supported by the fact that base interest rates are on a downward trajectory which could further lower costs for buyers.”
Matt Thompson, head of sales at Chestertons, said: “February’s property market saw a decline in first-time buyer enquiries as the chances of finding a property in time to beat the changes to stamp duty are now nil. We did, however, see continuous demand from other buyer demographics; especially after the Bank of England announced a rate cut to 4.5%. With the news of sub-4% mortgages returning to the market, we expect more house hunters to start their search over the coming weeks.”
Marc von Grundherr, director of Benham and Reeves, added: “As of 1st April, the average London first-time buyer is set to see the stamp duty owed on their purchase increase by around £6,000-£10,000, so it’s a considerable increase in cost and one that is, of course, in the minds of those currently progressing a purchase through to completion.
“However, with the deadline coming so swiftly after the Autumn Budget, many buyers are already progressing with their plans to purchase on the basis that they may well have to pay this additional cost, and so we haven’t seen much turbulence in the form of buyers pulling out.
“There has been some further negotiation with respect to offers submitted to try and alleviate the increase in stamp duty costs incurred but the vast majority of buyers are proceeding as planned.”
Asking price growth slows amid strong seller competition and looming stamp duty deadline
Read the orginal article: https://propertyindustryeye.com/property-industry-reacts-to-new-rightmove-house-price-index-2/
