As the UK housing market heads into spring, buyers are poised to benefit from a decade-high selection of properties for sale, driven by a surge in available homes despite a looming stamp duty deadline. However, increased competition is pushing many sellers to temper their pricing expectations, as a report from Rightmove reveals.
The average asking price for properties listed in March has risen by 1.1% or £3,867, bringing the national average to £371,870. This increase aligns with the typical seasonal rise in March, but the property website notes that sellers are adopting more realistic pricing strategies this year, in contrast to the over-optimistic pricing often seen during the spring months.
This flurry of activity is largely fueled by buyers rushing to finalize deals before the end of March, when a temporary boost in stamp duty thresholds is set to expire. The tax break, introduced in September 2022, will end on March 31, meaning that many buyers who miss the deadline will face significantly higher tax payments. As a result, there is currently a backlog of approximately 575,000 property transactions in progress.
Rightmove reports that 74,000 of these transactions, including 25,000 first-time buyers, are expected to miss the stamp duty deadline, collectively facing an additional £142 million in tax charges. In response, Rightmove’s property expert, Colleen Babcock, has suggested that there is still a chance for a short extension, especially given the spring statement by Chancellor Rachel Reeves on March 26, which could offer an opportunity for relief.
Despite the economic uncertainties and political turbulence of recent months, the UK property market has remained resilient in 2025. The number of sales agreed upon is up 9% compared to this time last year, while new sellers have increased by 8%. Mortgage rates, although slightly lower than last year, continue to pose challenges for buyers. The average five-year fixed mortgage rate stands at 4.74%, a slight decrease from July’s peak of 6.11%, but still a bit higher than the 4.84% rate seen a year ago.
Matt Smith, a mortgage expert at Rightmove, explained that mortgage rates continue to fluctuate in response to global economic conditions, particularly affecting first-time buyers and those with smaller deposits. Although the Bank of England is expected to leave interest rates unchanged at its upcoming meeting on Thursday, further reductions are anticipated by May.
Rightmove has welcomed recent proposals from the mortgage regulator aimed at simplifying the lending process. These proposals focus on easing the mortgage application process for home movers and, in the longer term, finding ways to support first-time buyers in securing larger loans.
Looking ahead, Rightmove predicts 1.15 million property transactions for 2025.
In a separate report, estate agent Savills noted that the UK housing market saw growth in 2024, expanding by £22.3 billion to reach a total value of £379 billion, a 6.3% increase. The report also highlighted a rise in mortgage debt, particularly among first-time buyers, who saw their debt increase by 21%, or £12.2 billion.
While the size of London’s housing market has contracted, falling behind the South East for the first time in two years, Savills anticipates that further interest rate cuts will broaden the range of buyers in the market, thereby boosting spending power over the next year. Despite being below its pandemic peak, the UK housing market remains £36 billion larger than it was before the pandemic.
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