High council tax rates and other financial penalties aimed at holiday lets and second homes are now having a noticeable effect on the housing market, according to Rightmove.
In its latest House Price Index, Rightmove highlights that these additional costs are playing a role in shifting property dynamics in popular holiday destinations.
The property website points out that increased stamp duty on investment properties and second homes—combined with higher council tax charges in areas like Cornwall and Devon—have likely influenced the growing number of properties being listed for sale.
These areas, particularly in the far south west of England, have been heavily impacted by some of the UK’s steepest tax premiums on second homes. As a result, they are now seeing some of the sharpest declines in asking prices.
Rightmove reports what it describes as an “unusual” drop in asking prices this month, suggesting that the trend bucks the norm seen during this time of year.
According to the data, the average asking price for a home coming onto the market fell by 0.3%, equivalent to £1,277, bringing the average listing price down to £378,240.
Historically, June has seen a modest rise in asking prices, typically averaging an increase of around 0.4% over the past ten years. This year’s dip is a clear deviation from that trend.
Rightmove suggests that this downturn could be partially attributed to a delayed market response following the stamp duty increases that came into effect in April across England.
Earlier in the year, April and May recorded stronger than anticipated price growth, which may have masked the early impact of these changes. The current drop appears to be a market correction catching up.
In addition to tax-related influences, the ongoing high volume of homes available for sale is further contributing to the downward pressure on prices.
The portal notes that this surge in available properties, at levels not seen in over a decade, gives buyers more choice and bargaining power, which in turn dampens price growth.
As the housing market adjusts to both seasonal patterns and new tax policies, sellers in high-tax regions may find it increasingly challenging to achieve their original price expectations.
Buyers, on the other hand, could see new opportunities emerging in areas that were previously unaffordable or highly competitive due to holiday let demand.
This shifting landscape underscores the importance of local tax policies and their ability to influence wider market trends, especially in regions reliant on second home ownership.
Rightmove has suggested that more competitive pricing—through lower asking prices and price reductions—is starting to drive improved sales activity. In fact, May recorded the highest number of sales agreed since March 2022.
While some areas are seeing notable drops in house prices, regions such as the North West, Wales, and Yorkshire & The Humber have seen the biggest increases this month. These areas are generally more affordable and less affected by recent stamp duty changes. Wales, for instance, isn’t impacted by the increases at all.
Another key factor is supply. In these more resilient regions, the number of homes for sale has risen less dramatically compared to the supply levels in southern England. This balance appears to be supporting more stable price trends in those locations.
Nationwide, the UK’s average asking price is still 0.8% higher than it was at the same time last year, showing that despite challenges, the market has held up in some areas.
Colleen Babcock, a property expert at Rightmove, says agents are finding that homes priced competitively have a much better chance of securing a buyer. Sellers appear to be responding to this advice, contributing to stronger sales figures.
She adds that maintaining realistic pricing will be essential over the coming months, especially as regional variations continue to emerge. These price shifts are often tied to local buyer affordability and the number of available homes.
May also saw a 6% increase in sales agreed compared to the same month last year. Additionally, the number of new buyers entering the market was up 3% year-on-year, indicating steady demand.
However, supply still outpaces demand. There’s been an 11% rise in new listings compared to May last year, which means that buyers currently have a wide range of homes to choose from.
This surplus in supply makes the market especially sensitive to pricing, particularly given recent minor increases in mortgage rates. Rightmove’s mortgage tracker indicates that the average five-year fixed rate is currently 4.61%, just below last year’s 5.04%.
Given these conditions, sellers are encouraged to ensure their listings are compelling and offer good value compared to similar properties. A strong online presentation is more important than ever.
Rightmove’s data reveals that homes which generate an enquiry on the first day of being listed are 22% more likely to sell than those that take over two weeks to get a first enquiry. This highlights the impact of strong marketing and accurate pricing.
Babcock says the current market is favourable for buyers thanks to the large selection of properties, which gives them greater room to negotiate. Those looking to sell and buy at the same time may be able to secure discounts on both ends of their transaction.
She concludes that the fact sales are happening at the highest rate since March 2022 is an encouraging signal. Sellers who invest in quality listings and set realistic prices from the beginning are the ones seeing the best results.
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