What's Happeing with House Prices This Month?

We're right in the midst of the Spring real estate selling season, the busiest time of the year for selling homes.

Rightmove's latest House Price Index shows that the average asking price of properties coming to market has increased by 1.1% (+£3,876) this month to £371,870. This increase is within the typical seasonal trend. Additionally, the number of homes for sale is at a ten-year high, indicating strong seller confidence and a growing desire to move in 2025.

What is the reason for the price increase?

Study shows February and March are usually the best months for houses to be offered on the market, with most homes selling then in the largest percentage. It tends to help sellers take advantage of increased business and sell at premium prices. The price spike this month also fits the overall seasonal trend and reflects that houses are being put on the market realistically and that sellers are not reaching too far.

But new sellers are being set against a record number of listings, giving buyers significantly more choice than they have enjoyed in recent years. The "top-of-the-ladder" segment—four-bedroom detached houses and five-or-more-bedroomed homes—has posted the largest price increases, 2.1% higher this month. Smaller homes traditionally favoured by first-home buyers have increased by a lesser 0.5%.

Buyers enter final straight of the stamp duty race

With the deadline for stamp duty in March just days away, various analysis have discovered a colossal 575,000 homes yet to be finished in the conveyancing pipeline. Dozens of these buyers will risk thousands of pounds in additional moving expenses if their sales are not finalised on time.

As hopes of an extension diminish, the Chancellor's Spring Statement, to fall on the night before the deadline, could be an ideal opportunity for the government to introduce a short extension. This would be a relief for buyers who had hoped to be finished on time but have been delayed by the present long conveyancing process.

What are the experts' opinions?

Overall, property market forecasts continue to be healthy despite the imminent new tax reform. Levels of activity continue to rise, and buyers can now choose from a wider selection of homes, rendering the market dynamic and competitive.

Mortgage rates continue to be a big factor in the affordability of buyers. Rightmove's mortgage specialist, Matt Smith, said: "We’re still seeing lenders price competitively where they can to secure mortgage business at this typically busy time of year. However, the economic turbulence happening globally is impacting mortgage rates, and we’re seeing some small rate fluctuations on a week-by-week basis."

What else happened?

The property market remains robust. Sales transactions are 9% higher than at this point in 2024, and new sellers are up 8% on last year. These are positive indicators that market activity will continue to be strong despite the stamp duty rises in April.

New Spring buyers who are losing out on the stamp duty savings this time around will be faced with the choice of properties that are available to purchase over the autumn months for the first time since 2015. The increased levels of stock are holding back a more even playing field. But it also means vendors must price sensibly to maintain the pace.

Mortgage rates continue to be a Buyer Affordability issue, at 4.74% as the average five-year fixed rate. That's lower than July 2023's high of 6.11%, but only half a percentage point less than the 4.84% this time last year. You can check the latest average mortgage rates here.