According to Rightmove’s February House Price Index report, the average asking price for property in the UK reached approximately £367,994 (€442,255.2). This marked a modest monthly increase of 0.5%, or £1,805 (€2,169.3), which was notably lower than the 1.7% rise recorded in January.
The slower growth was largely due to sellers adjusting their price expectations in response to shifting market conditions. Additionally, the looming stamp duty changes created uncertainty, further tempering price increases. Increased competition among sellers also played a role in the subdued figures.
On an annual basis, the national average asking price rose by 1.4% in February, down from the 1.8% growth reported in January. This suggests a gradual cooling in price momentum compared to earlier in the year.
Regional trends varied, with some areas seeing price increases while others experienced declines. In Scotland, house prices climbed by 3.5% in February, while the North West recorded a smaller rise of 0.3%.
Conversely, house prices in the North East dipped by 0.3%, and Wales saw a more significant drop of 2.7%. These fluctuations highlight the uneven nature of the UK housing market as it adapts to evolving economic conditions.
House prices in the South West saw a monthly increase of 1.6% in February, while the South East experienced a more modest rise of 0.9%. In London, house prices climbed by 2.3% over the same period, reflecting ongoing demand in the capital.
A significant change is set to take place from 1 April 2025, as the temporary increase in the Stamp Duty Land Tax (SDLT) threshold comes to an end. This change is expected to have the greatest impact on first-time buyers.
Currently, the SDLT threshold stands at £425,000 (€511,030.6), allowing buyers to avoid stamp duty on purchases below this amount. However, from April onwards, the threshold will revert to £300,000 (€360,727.5).
As a result, first-time buyers will only be exempt from stamp duty on homes priced below £300,000. Any purchases above this amount will be subject to additional tax costs, potentially influencing buyer demand in the coming months.
Variable levels between top and bottom
Asking prices for buyers at the top of the property ladder saw a slight increase of 0.6% in February compared to the previous month, with an annual rise of 2.1%. Meanwhile, second-steppers experienced a 0.5% monthly increase, with prices up by 1.5% year-on-year.
In contrast, first-time buyers saw a marginal decline in asking prices, which dipped by 0.1% in February. However, on an annual basis, prices for this group still recorded a 0.9% increase.
The number of properties available for sale has now reached a 10-year high. This increased supply has played a role in limiting the price growth typically seen at the start of the year.
Long closing times further discourage house sales
Currently, it still takes around five months to finalise a house purchase in the UK. As a result, consumer interest has slowed, with many buyers realising they are unlikely to complete their transactions in time to avoid April’s stamp duty increases.
Despite this, market activity remained strong compared to the same period last year. The number of new sellers entering the market rose by 13%, while buyer demand also saw an 8% increase.
However, ongoing economic and geopolitical uncertainty continues to affect both market sentiment and the housing outlook. Many buyers are closely monitoring upcoming inflation data before making decisions.
Sellers’ expectations dampening
Slowing interest and mortgage rates could provide a boost to the housing market in the coming days.
Colleen Babcock, a property expert at Rightmove, commented on the current market trends in the company’s February House Price Index report. She noted that new sellers are showing more restraint when setting prices after a strong start to the year. Many are being cautious due to the high level of seller competition and, in England, the looming stamp duty deadline, which could bring additional costs for some buyers.
Estate agents have reported that sellers are adjusting their price expectations to align with changing market conditions. This strategic move is expected to attract more buyer interest and help maintain market activity. The stamp duty deadline remains a key concern, as its impact will vary—some movers may be unaffected, while others could face significant financial strain.
Babcock also highlighted the need for stamp duty reforms, including regional variations to address existing inequalities in the system. She pointed out that delays in conveyancing could result in some buyers missing the deadline and being forced to pay more tax through no fault of their own. Given this, she suggested that a short extension before the end of March would be a fair and reasonable decision by the government.
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