Market analysis indicates home sellers whose property could be considered prime targets for first time buyers have cut asking prices in order to capitalise on the rush to buy before the current stamp duty reliefs finish on 31st March 2025; after which the threshold reduces from £250,000 to £125,000, with a 2% charge applying on the next £125,000 portion from £125,001 to £250,000.
The research was conducted by GetAgent.co.uk and suggests that although there is an anticipated ‘market correction’ in the months after the 31st March, ‘the nation’s sellers remain keen to transact and that any market correction that does come as a result of the impending stamp duty changes will be a minor one’ says GetAgent.co.uk CEO Colby Short.
341,000 listings were reviewed from property portal Zoopla where price trends in the current market have been analysed to determine the proportion of home sellers who have reduced their asking price expectations and how this varies by price category. Unsurprisingly the largest proportion of price cuts impact the core segment of the market, where properties are most likely to be affected by the removal of current stamp duty reliefs; with the highest percentage of price cuts coming in price ranges set to be hit by higher SDLT.
35% of all homes listed up to £125,000 have currently seen an asking price reduction, suggesting that many sellers may have realigned their price to sit beneath the new threshold at which no stamp duty will be payable as of 1st April. 38% of all homes priced between £125,000 and £250,000 have also had a downward price adjustment again suggesting sellers are lowering their price expectations to help sales.
Just over one third (35%) of homes listed for sale between £250,001 and £950,000 have seen an asking price reduction, falling to 31% between £925,001 and £1.5m and just 29% over the £1.5m threshold. The South East (41%), London (39%), East of England (36%) and South West (36%) have seen the highest proportion of homes listed subject to an asking price reduction.
Co-founder and CEO of GetAgent.co.uk, Colby Short, commented:
“Reductions to asking price are unfortunately commonplace in any market landscape as sellers will chance their arm with a slightly over-ambitious valuation, before readjusting to current market values having received little to no interest during their first few weeks or months on the market. However, it’s clear that with April’s stamp duty changes now on the horizon, a higher proportion of sellers are also lowering their expectations at the key price points in the market in order to account for these changes and entice a buyer.”
The research chimes with the latest Halifax house price index which shows a slight monthly dip in February -0.1%. Annual growth also held steady at +2.9%, with the average house price edging down by just £213 to £298,602.
“February’s figures highlight the delicate balance within the UK housing market. While there’s been talk of a last minute rush on new mortgages ahead of the changes to stamp duty, inevitably we’ve seen some of the demand that was brought forward start to fade as the April deadline ticks closer, given the time needed to complete a purchase. That may help to explain why growth in first-time buyer property prices eased in February, falling to +2.4%, in contrast to homemover price inflation which accelerated, reaching +3.7%”
said Amanda Bryden, Head of Mortgages at Halifax, concluding
“While house price growth has slowed overall, market activity remains strong and comparable to pre-pandemic levels, demonstrating a resilience amongst buyers that’s been evident in the face of higher borrowing costs. While those affordability challenges persist, the ongoing shortage of housing supply coupled with sustained demand suggests property prices will continue to rise this year, albeit at a more measured pace compared to last year.”
