The housing market appears to still be recovering from the stamp duty rush, as new data from Rightmove shows a more subdued spring market.
Spring is usually a busy season for selling a property, but the market already faced a rush of activity during the first quarter of 2025 as buyers looked to complete deals before stamp duty thresholds dropped. This meant house prices rose at the start of the year but demand has since slowed, pushing down asking price growth.
The latest House Price Index from Rightmove shows the average price of property coming to the market rose by 0.6% on a monthly basis at the start of May and by 1.2% annually to £379,517. Despite asking prices hitting a new record high, this is the slowest rate of growth since 2016.
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Sellers are adjusting their prices as supply is currently outweighing demand. Rightmove said the number of available homes for sale is at a ten-year high, while new buyer demand slowed in April to 4% below the same month in 2024.
This is the first month this year that buyer demand has fallen below last year’s level. However, demand in the year to date is still 3% ahead of last year. In contrast, the number of new properties coming onto the market for sale is now 14% ahead of this time last year. This suggests we are now in a buyer's market, with the choice of homes at a decade-high.
Rightmove said appropriate pricing is key, highlighting that the number of sales being agreed in the past month is still 5% higher than at this time last year.
The analysis also shows that there has been a 32% increase in the number of sellers who have swapped estate agent to try and find a buyer.
Colleen Babcock, property expert at Rightmove, said: “It’s another new price record this month, but having seen a May price record for the last five years, it appears to be driven more by seasonal factors, given that new buyer demand has slowed.
“The ten-year high choice of homes for sale means that sellers need to be aware of the level of competition they’re facing for the attention of buyers, and the prices that are being advertised in their location. In the current market, buyers may well have several similar homes to choose from in their area, and a home that appears over-priced compared to the competition may not get a second look.
"This month’s price increase, being the lowest in May for nine year,s is a sign of a market that favours buyers and is more subdued than usual.”
Will house prices fall in 2025?
Many analysts expected house price growth to slow in the aftermath of stamp duty changes as buyers adapt to higher property taxes on their purchase.
But the latest interest rate cuts by the Bank of England have given buyers hopes of cheaper mortgage deals, which could boost demand and push prices higher.
Rightmove is predicting that asking prices will rise 4% in 2025.
When it comes to sold prices, Zoopla has predicted 2.5% growth by the end of the year.
Estate agency brand Knight Frank recently revised up its forecasts for price growth this year from 3.5% from 2.5% this year due to interest rate cuts.
But it is less bullish on prime central London and has warned that growth could be flat due to demand being hit by the end of non-dom status and higher taxes.
Tom Bill, head of UK residential research for Knight Frank, said: “Markets are pricing in between two and three further cuts this year, which means fixed-rate mortgages are getting cheaper. It should underpin demand in the UK housing market this spring irrespective of whether the cuts happen, or inflation eventually puts upwards pressure on borrowing costs again.”
Toby Leek, president of estate agent brand NAEA Propertymark, added: “It’s no surprise that April saw a lull in market activity as many of those who wanted to move home, did so before stamp duty increased from 1 April.
"However, prices and the market long term remain resilient and with improved mortgage products now being introduced, buyers are finding extra room in their finances, keeping the cogs of the housing market rotating, and in turn, the wider economy too.”
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