UK house price increase restarts as demand grows and new sellers pause

LaToya Harding
·2 min read
A couple look at houses for sale at an estate agents in Market Town of Leek, England. Photo: Nathan Stirk/Getty
A couple look at houses for sale at an estate agents in Market Town of Leek, England. Photo: Nathan Stirk/Getty

The average price of property coming to market in the UK increased by 0.5% this month, after three consecutive months of decline, as demand continues to grow, new data has found.

High demand outstripped supply, pushing up average prices £1,522 ($2,101), however, new seller numbers dipped 21% on the prior year as owners of family homes delayed coming to market, Rightmove’s (RMV.L) house price index revealed.

In the first week of February visits increased 45% compared to the same time last year, with home-hunters sending 18% more enquiries, and the number of purchases agreed up by 7%.

The property website added that one in five buyers who agreed a purchase in July last year have still not completed more than six months later, with an estimated 100,000 buyers in total still likely to miss out on their expected tax saving.

Although it is too late to complete a new purchase before the stamp duty holiday ends on 31 March, Rightmove said that “many buyers’ desires to move are not dependent on the potential saving.”

“Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’,” Tim Bannister, Rightmove’s director of property data, said.

“It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.”

READ MORE: UK house prices expected to fall as lockdown, stamp duty deadline and job cuts weigh

The property market has been allowed to continue to function during the latest national lockdown since the start of January, but industry figures say virus fears and restrictions are still limiting activity.

Many estate agents and surveyors said they expected the looming end to temporary stamp duty and land tax holidays across the UK to hit sales in months to come. Several said they expected current sales to be renegotiated but not fall through if they miss the deadline and buyers face higher tax bills.

Richard Freshwater, director at estate agents Cheffins in Cambridge, said: “As momentum builds behind the calls to extend the stamp duty holiday, the Chancellor’s announcement on the 3rd March ought to help bring some clarity to how market trends might take shape throughout 2021.”

WATCH: How much money do I need to buy a house?