The UK housing market saw a 0.5% increase in average house prices in February, reaching £367,994. However, this modest growth coincides with a 10-year high in available homes for sale, according to Rightmove. This surge in supply has contributed to weaker price growth than typically expected in February.
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The Stamp Duty Deadline Looms
A significant factor influencing current market dynamics is the approaching stamp duty deadline. Buyers are rushing to complete transactions before the April 1st changes, creating a potential conveyancing bottleneck. With over 550,000 homes sold but awaiting legal completion – a 25% year-on-year increase – the pressure is mounting.
First-time buyers purchasing properties between £500,001 and £625,000 are particularly vulnerable. Missing the deadline could result in an additional £11,250 in stamp duty. Given the average transaction completion time of approximately five months, many buyers have been racing against the clock to finalize purchases before the end of March.
London’s First-Time Buyer Bottleneck
London is anticipated to experience the most significant logjam of first-time buyers attempting to complete before the March 31st deadline. Rightmove reports a 28% year-on-year increase in first-time buyers navigating the completion process in the capital, exceeding all other regions. Avoiding substantial extra costs is a primary driver for this accelerated activity.
“For those in higher-priced areas of England like London, the additional stamp duty charges they face can be significant and difficult to afford when already stretched to the max,” explains Colleen Babcock, property expert at Rightmove. “The lengthy and frustrating completion process means that the average mover has had to have one eye on the clock since November to ensure that they complete before the stamp duty deadline.”
Market Activity Remains Strong Despite Potential Slowdown
Despite the looming deadline, overall market activity remains robust. The first full month of 2025 saw a 13% increase in new sellers entering the market, an 8% rise in buyer demand, and a 15% surge in agreed sales compared to the previous year. Rightmove suggests that slower price increases are supporting these underlying activity levels and anticipates no significant drop-off post-April.
However, industry experts offer a more cautious outlook. “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,” says Toby Leek, president of NAEA Propertymark. “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.”
Long-Term Outlook
The long-term implications of the stamp duty deadline and the current market dynamics remain to be seen. Future inflation and interest rate announcements will likely play a crucial role in shaping affordability and influencing buyer behavior in the months to come. The interplay between supply, demand, and government policy will continue to define the UK housing market’s trajectory.
