UK house prices stabilised in February, with Scotland and London seeing gains, while Wales and the North East were more sluggish.
ADVERTISEMENTAsking prices for property in the UK in February were an average of around £367,994 (€442,255.2), according to Rightmove’s February House Price Index report. That was a rise of approximately 0.5%, or £1,805 (€2,169.3) and less than the 1.7% seen in January.
The lower growth was smaller than usually seen at this time of the year, mainly subdued because of sellers’ falling price expectations and the upcoming stamp duty changes. Rising competition in the housing market contributed to this dampened figure as well.
On an annual basis, the national average asking price rose 1.4% in February, compared with January’s 1.8% figure.
On a month-on-month basis, house prices in Scotland inched up 3.5% in February, with the North West seeing an increase of 0.3%. On the other hand, house prices in the North East dropped 0.3%, with Wales also seeing a 2.7% fall.
House prices in the South West climbed 1.6% in February, on a monthly basis, with the South East also seeing a rise of 0.9%. London house prices advanced 2.3% in February on a monthly basis.
From 1 April 2025, the temporary threshold increases to the Stamp Duty Land Tax (SDLT) will come to an end, which is likely to affect first-time buyers the most. At present, the threshold is set at £425,000 (€511,030.6), but this will come back down to £300,000 (€360,727.5) from April onwards. This means that first-time home buyers will not pay any stamp duty on house purchases under £300,000.
Variable levels between top and bottom
Asking prices for buyers at the top of the ladder inched up 0.6% on a monthly basis in February as well as 2.1% on an annual basis. For second-steppers, asking prices rose 0.5% in February, while advancing 1.5% on a year-on-year basis.
However, for first-time buyers, national average asking prices dropped 0.1% on a monthly basis in February, although they rose 0.9% on an annual basis.
The number of properties available for sale has hit a 10-year high, going some way in capping the price hikes seen in the New Year.
Long closing times further discourage house sales
At present, it still takes about five months to complete a house purchase in the UK. This has meant a slowdown in consumer interest, as more buyers recognise that they will not be able to close their deals on time to avoid the April’s stamp duty increases.
Moving activity stayed strong compared with the same period last year, with a 13% rise in the number of new sellers coming into the housing market. There was an increase of 8% in buyer demand as well.
Ongoing economic and geopolitical uncertainty continued to weigh on the housing market’s outlook as well as market sentiment in general, with buyers keeping an eye on upcoming inflation numbers.
Sellers’ expectations dampening
However, slowing interest and mortgage rates may provide a boost to the housing market in the coming days.
Colleen Babcock, property expert at Rightmove, said in the company’s February House Price Index report on the company’s website: “New sellers are showing some pricing restraint after a fast start to the year, being mindful of both the high level of seller competition, and in England also of the looming stamp duty deadline and extra costs for some buyers.
“Agents report that some of the steam is coming out of new sellers’ price expectations to fit the changing market conditions, which is a sensible reaction to attract buyer interest, and it will also help to support activity levels. The upcoming stamp duty deadline in England remains a key talking point, and while some movers may not be affected at all, others will be more severely impacted.
ADVERTISEMENT“We’ve previously suggested reforms such as regional variations in stamp duty charges to try and address some of the inequities in the current system. With the predicted conveyancing log-jam likely to cause some buyers to miss the deadline and end up paying more tax through no fault of their own, it would seem justifiable for the government to announce a short extension before the end of March.”
