Newly listed house asking prices have seen a notable drop of nearly £12,000 over the past two months, as indicated by recent data from Rightmove.
In December, the average asking price for newly listed homes fell for the second consecutive month. The price decreased from £366,592 in November to £360,197 in December, which represents a decline of 1.7%. This drop follows the previous month’s reduction, when average asking prices fell by £5,366, or 1.4%, between October and November.
As a result, the typical asking price for newly listed homes has decreased by £11,761 over the past two months. While this may seem like a substantial fall, it is not entirely unusual and fits into the expected seasonal trends. According to Rightmove, such price adjustments are commonly seen during the winter months, especially as the Christmas holiday period approaches.
One key factor contributing to this price drop is the general slowdown in market activity. Traditionally, buyers tend to pause their property searches in the run-up to Christmas, with many waiting for the new year to resume their plans. This, in turn, reduces the demand for homes, giving sellers less leverage when it comes to setting prices. As the festive season nears, sellers are often more inclined to lower their asking prices to attract any remaining potential buyers before the market slows down even further.
Therefore, while the £12,000 drop in asking prices may seem significant, it is largely in line with the seasonal norm. The current trend reflects the typical pattern observed in the housing market during this time of year, where both buyers and sellers adjust their expectations and strategies in preparation for the upcoming year.
There is growing evidence that some buyers are making a concerted effort to beat the looming stamp-duty deadline on 31 March, with sellers responding to this increased urgency by opting to list their properties now. This shift in behaviour is primarily driven by the impending change in stamp duty rules, which has led both buyers and sellers to accelerate their decisions and actions within the housing market.
Sellers of smaller properties, particularly those located in higher-priced areas, are keen to trade up or, in some cases, simply sell before the deadline to avoid the higher stamp duty charges that will come into effect. This has resulted in a noticeable increase in listings from homeowners who need to act quickly, despite the pressure of time. These sellers are trying to secure a sale before the new stamp duty rules apply, which means that those purchasing properties over the £125,000 threshold will face up to £2,500 more in stamp duty charges.
The change to the stamp duty threshold is significant, as it will see the point at which home movers start paying the tax reduced from £250,000 to £125,000. This reduction in the threshold has created a sense of urgency in the market, particularly among buyers who are looking to purchase homes above this new limit. As a result, there is a rush of activity as many buyers and sellers attempt to navigate the system before the new rules are implemented.
Interestingly, while some areas of the housing market are seeing fluctuations, prices are holding up particularly well in the first-time-buyer sector. This is especially true for homes priced below the £300,000 threshold, where demand remains relatively strong. First-time buyers, many of whom are keen to secure a home before the stamp duty changes, are still actively engaging with the market, and properties within this price range continue to perform well despite the anticipated changes in tax rates.
In the past four weeks, the number of sellers offering typical first-time buyer homes, such as one and two-bedroom properties in London, has risen by 20%, according to Rightmove. This increase is the highest of any regional market sector, reflecting a noticeable shift in the capital’s housing market.
Following London, the South East has seen a 16% rise in the number of one and two-bedroom homes coming to market, making it the second most active region. Notably, the South East is also the second most expensive area in the country for property prices, which further highlights the market dynamics in the region.
An important change for first-time buyers is the upcoming shift in the stamp duty threshold. The price at which stamp duty will start to be charged on first-time buyer purchases is set to revert back to £300,000, down from the current threshold of £425,000. This means that, for some buyers, the amount of stamp duty they will need to pay could increase significantly.
For example, a first-time buyer purchasing a property worth £425,000, which is currently exempt from stamp duty, will soon face a charge of £6,205. This change could put additional financial pressure on first-time buyers, especially those purchasing homes within the price range between £425,000 and £625,000, where stamp duty costs continue to rise steeply.
A first-time buyer purchasing a home worth £625,000 currently pays £10,000 in stamp duty. However, from 1 April, this amount will rise significantly to £21,250, marking an increase of £11,250. This hike in stamp duty could have a notable impact on buyers in this price range, as they will face much higher costs when the new rules come into effect.
Interestingly, the market for first-time-buyer properties in more affordable areas is holding up more strongly. These areas are likely to be less affected by the stamp duty changes, as many first-time-buyer homes are priced well below the £300,000 threshold where stamp duty will start to apply. This could provide some relief for buyers looking to purchase in lower-cost regions, as the impact of the stamp duty changes may not be as significant for them.
In fact, prices for typical first-time-buyer homes in the North East have increased by 1% this month. This stands in stark contrast to the national trend, where property prices have fallen by 1.7% across all property types. The North East’s performance reflects the continued resilience of the first-time-buyer market in more affordable regions, even amid broader national market challenges.
Take advantage of the Boxing day boom?
Last year, Boxing Day saw a record number of new sellers entering the market, providing fresh property options for buyers during this time of year. This surge in new listings was particularly notable, as it offered prospective buyers more choice as they looked for properties to purchase.
In addition to the increase in new sellers, buyer enquiries also saw a massive jump. Between the Christmas Day lull and Boxing Day, buyer enquiries surged by 273%. This significant rise in interest highlights how the festive period marks a key moment in the property market, as many people take the opportunity to plan their next move.
Tim Bannister from Rightmove is expecting a similar trend to unfold this year. “We are now looking ahead to the traditional Rightmove Boxing Day bounce in home-mover activity, which has increasingly become a key date in the housing market calendar,” he said. He explained how Rightmove’s real-time data can pinpoint the exact moment when people start browsing for homes after the Christmas celebrations are over.
Bannister added, “Each year, we see that the moment the turkey is finished, family games wind down, and mobile devices are picked up, prospective movers flood onto Rightmove and get their 2025 move started.” He noted that early movers who begin their search the day after Christmas are likely to be rewarded with a wide range of fresh properties to consider.
Steven Holden, director at Holden Copley estate agents in Nottingham, also commented on the expected market trends. “Naturally, December brings a seasonal slowdown in new listings as many shift their focus to the festivities,” he said. However, he is confident that the post-Christmas period will see a surge in activity. “We expect the traditional post-Christmas surge in activity to kickstart the new year, with Boxing Day marking the beginning of a busy period.”
Holden advised that getting a valuation now or in early January will put prospective sellers in a strong position. This would allow them to take advantage of buyers who are actively searching for properties that are priced correctly and ready to move into.
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