Is now a good time to sell a house?

Stamp duty changes at the start of April have pushed up moving costs, with some property experts reporting a slowdown in the market as a result. This could make it more difficult to sell a house.

House prices fell by 0.6% on a monthly basis in April, according to mortgage lender Nationwide. The annual growth rate also slowed to 3.4%, down from 3.9% the month before.

“The market is likely to remain a little soft in the coming months, following the pattern typically observed following the end of stamp duty holidays,” said the bank’s chief economist Robert Gardner.

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“Nevertheless, activity is likely to pick up steadily as summer progresses, despite wider economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive.”

While Gardner is optimistic that the property market will pick up, supply and demand dynamics may look better for buyers than sellers right now.

Separate data from Zoopla shows the supply of homes for sale is 12% higher than a year ago, while buyer demand is just 1% higher. This is "keeping house prices in check", the company said, as buyers have a decent stock of houses to choose from.

“The average estate agent currently has 34 homes for sale, compared to 31 this time last year and a low of 15 in 2022 during the pandemic boom,” said Richard Donnell, executive research director at the property website.

What’s happening with house prices?

The latest house price data paints a mixed picture. Zoopla and Nationwide’s house price indices (covering March and April respectively) both show a slowdown in response to stamp duty changes.

Meanwhile, Halifax found that house prices increased by 0.3% on a monthly basis in April, suggesting ongoing resilience in the market. The annual rate of price growth also rose to 3.2%, up from 2.9% the month before, hitting its highest level so far this year.

April’s sentiment survey from the Royal Institution of Chartered Surveyors was less positive, showing that house prices were “more or less flat” over the period, while measures of new buyer demand and agreed sales both weakened.

A clearer picture should emerge over time as we accumulate more datapoints. For now, the stamp duty changes are too recent to extract any decisive trend.

HM Land Registry’s house price index – which is the most authoritative source – could also shed further light on the topic. This is published with a two-month time lag, so we won’t get April’s figures until 18 June.

The good news is that house prices are expected to end the year in positive territory, according to most experts.

Estate agent Savills expects the average UK property to end the year 4% higher, while real estate consultancy Knight Frank is forecasting 3.5%, having recently revised this projection upwards thanks to the improving interest rate landscape.

There will of course be regional variations, with prices currently rising more rapidly in the north where affordability is less stretched.

Is now a good time to sell a house?

The answer to this question depends on your personal circumstances as well as the state of the property market. You might need to move for work, or could require a larger house for a growing family. In cases like these, timing the market perfectly isn’t always practical.

Even if the current market is skewed slightly in favour of buyers, there are steps sellers can take to make their home more sellable.

“Our research shows that getting the price right the first time is key. Homes that don’t need a reduction in price are more likely to find a buyer, and to find that buyer in less than half the time,” said Colleen Babcock, property expert at listing site Rightmove.

Presenting your home in the most attractive light can also help it sell in periods when the market slows down.

“It may sound obvious, but clean up, declutter and make sure any obvious defects are put right before the photos are taken and viewers start coming round,” said Ben Hudson, managing director at Hudson Moody, an estate agent in York.

Other considerations include whether you are looking to buy a property at the same time as you are selling your existing home – and how much that new property costs.

Mortgage rates are on a downward trajectory and are expected to fall further over the course of this year, but remain high compared to their long-term average. This might prove off-putting to those weighing up whether to take on more debt to upsize.

That said, house prices often rise as interest rates fall, so waiting until mortgage rates are lower could mean you end up having to offer a higher asking price when you do ultimately move further down the line.

Sarah Coles, head of personal finance at Hargreaves Lansdown, explains: “If you’re selling and buying at the same time, you can trade the loss of a premium on your property for being able to drive a harder bargain where you’re moving. The exception to this is for those who are downsizing.”

The best time to downsize is generally when property prices are on the rise. If both the home you are selling and the property you are buying have increased in value by, say, 5%, you will make a bigger profit overall as the property you are selling is worth more.

For those who are stepping up and buying a more expensive home, rising property prices make the transaction more expensive.

It is worth pointing out that house prices perform very differently in different parts of the UK, so you may find that prices have not changed in the same way in both your local area and where you would like to move to.

If you are thinking of selling, you will also have to consider the costs involved. This can include estate agent fees, legal fees, stamp duty, and capital gains tax in the case of second homes. If you are selling because you would like to free up some money, you should weigh up whether it is still worth it after the costs.