Big houses ‘driving the housing market’ as sellers ‘seek to beat Budget tax rises’, Rightmove data suggests

There has been a surge in big houses appearing on the property market amid speculation about tax rises in the Budget, Rightmove analysis has suggested.

The property listing site - which is currently at the centre of a takeover bid - found that sales listings for top-of-the-rung houses were 15% higher year-on-year last week. It comes amid reports that Chancellor Rachel Reeves could hike Capital Gains Tax (CGT) and change Inheritance Tax (IHT) rules in her fiscal speech in October.

CGT currently applies to second homes, properties that come with large grounds, and sales of inherited properties. Meanwhile, IHT is already likely to apply to estates that include big homes. Changes to either tax could have significant financial implications for their owners. By selling up now, they may be trying to cash out before any increases come in. 

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Rightmove suggested that tumbling mortgage rates also could be behind the uptick. Before the influx of top-end homes, it said bottom-rung properties had been driving the market. According to its latest House Price Index, those looking to sell are continuing to face a buyer’s market.

East of England region sees biggest availability spike for big houses

The property listing website’s analysis specifically focused on top-rung activity between 3 and 9 September. This category includes four-bedroom detached houses and properties with five or more bedrooms. 

It found the number of larger homes coming to the market in Great Britain was 15% higher compared to the same period last year. Over the previous week (27 August to 2 September), the top end of the market had been up just 3%.

The early September spike was most pronounced in the East of England, where the number of big properties coming to the market was 21% higher against the year. The South West (+20%), North West and West Midlands (both +19%) all saw similarly large increases.

At the other end of the scale, Scotland only saw a small 3% uptick, with Yorkshire and the Humber seeing a small rise of 4%. Every other region saw a double-digit increase. London, the most expensive place to buy in the UK, was closer to the GB-average at 14%.

While speculation about tax hikes has been rife since Rachel Reeves announced that she was battling a big ‘black hole’ in the public finances, the changes Rightmove has seen coincide with Sir Keir Starmer’s 27 August Downing Street garden speech. In it, the Prime Minister warned that the Budget is “going to be painful”. He added that the wealthiest people "should bear the heavier burden", suggesting tax hikes could be specifically aimed at those with big assets.

The figures also tie in with a drop-off in mortgage rates. The website’s weekly deals tracker showed the average five-year rate for those with a 40% deposit (the sort of amount a high-end buyer could stump up) now sits at 3.97%, having been 5.27% this time last year. Rates for high-deposit mortgages are tracking roughly a percentage point higher.

Rightmove’s property expert Tim Bannister stated that the findings marked a significant shift in market activity. He said: “Throughout this year we have typically been seeing more activity at the top-end compared with last year, as movers in this sector were hit with peak mortgage rates and lower availability of homes to choose from.

“Since the Bank Rate cut, the trend we were seeing is more smaller and mass-market homes coming to market for sale, but in just the last week we’ve seen a flurry of activity at the top-end again. Some of the lowest mortgage rates since before the mini-Budget are now available for those with a large deposit, and a mooted increase in capital gains tax is also likely to be contributing to decision making right now.”

The site suggested the trend could continue, as a greater choice of homes for sale in a particular part of the market tends to encourage other homeowners in that sector to consider selling.