UK markets closed
  • FTSE 100

    6,915.75
    -26.47 (-0.38%)
     
  • FTSE 250

    22,251.26
    +3.72 (+0.02%)
     
  • AIM

    1,236.50
    -2.54 (-0.21%)
     
  • GBP/EUR

    1.1513
    -0.0009 (-0.08%)
     
  • GBP/USD

    1.3707
    -0.0028 (-0.20%)
     
  • BTC-GBP

    43,649.88
    -896.28 (-2.01%)
     
  • CMC Crypto 200

    1,235.89
    +8.34 (+0.68%)
     
  • S&P 500

    4,128.80
    +31.63 (+0.77%)
     
  • DOW

    33,800.60
    +297.03 (+0.89%)
     
  • CRUDE OIL

    59.34
    -0.26 (-0.44%)
     
  • GOLD FUTURES

    1,744.10
    -14.10 (-0.80%)
     
  • NIKKEI 225

    29,768.06
    +59.08 (+0.20%)
     
  • HANG SENG

    28,698.80
    -309.27 (-1.07%)
     
  • DAX

    15,234.16
    +31.48 (+0.21%)
     
  • CAC 40

    6,169.41
    +3.69 (+0.06%)
     

UK house prices fall as buyers struggle for time to beat stamp duty deadline

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Abigail Fenton
·Writer
·4-min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
For Sale estate agent sign displayed outside a terraced house in Crouch End, London
Visits to Rightmove have continued to increase since the start of January, and are up by 33% on the same period in 2020. Photo: Getty

Property prices are falling as buyers surge to find more homes amid the COVID-19 pandemic, despite slim chances of beating the stamp duty holiday cutoff date.

According to data from property portal Rightmove (RMV.L), the number of sales agreed is up by 9% so far year-on-year in January.

Sellers are continuing to price very competitively, with newly-marketed property asking prices down by about 0.9% — £2,887 ($3,920) — on the month.

Many sellers may still be hoping to find a buyer and complete the sale before the stamp duty holiday comes to an end on 31 March — though the odds are stacked against them, Rightmove noted.

Last year also had a very active start, being buoyed by the post-election “Boris bounce.” This came to an abrupt end with the first COVID-19 lockdown in March and the temporary closure of the housing market, the experts explained.

But, it was followed by a far stronger resurgence as people reassessed their housing needs and priorities following their experience of lockdown.

Despite temporary market closures in 2020, people’s housing needs meant the number of sales agreed was up by 10% for the whole year compared to 2019.

With the UK once again in lockdown, there are early signs it will surpass 2020’s new-year surge in activity, with the number of prospective buyers contacting agents between 2 and 12 January up 12% year-on-year the number of buyers contacting agents rose by 12%.

Rightmove said that visits to its website have continued to increase since the start of January, and are up by 33% on the same period in 2020.

Average asking price trend from January 2020 to January 2021. Graph: Rightmove
Average asking price trend from January 2020 to January 2021. Graph: Rightmove

READ MORE: UK housing boom slows down as lockdown 'chill' hits market

With Rightmove analysis showing it currently takes 126 days from the time an offer is accepted until legal completion, new buyers should not be factoring in any stamp duty savings. This is unless they are first-time buyers, who will still be mainly exempt after the March deadline has passed.

Of those already in the sales agreed pipeline — an estimated 613,000 — the analysis projects about 100,000 will miss out on their stamp duty saving.

“Seller flexibility to re-negotiate will be key to preventing some sales from falling through for this group,” said Rightmove.

It added: “However, it should also be remembered that the surge in buyer demand after the first lockdown in 2020 was initially driven by movers’ changed housing needs – and thus started a couple of months before the July introduction of the stamp duty holidays.

“The combination of the two resulted in an amazing recovery in 2020 activity despite the pandemic, with the number of sales agreed up by 10% compared to the whole of 2019.”

The average number of days it takes to secure a buyer nationally. Chart: Rightmove
The average number of days it takes to secure a buyer nationally. Chart: Rightmove

Tim Bannister, Rightmove’s director of property data, said: “While the tax savings were an added incentive, movers’ desire for more inside and outside space seems to be continuing, and this new lockdown could be a spur to act in 2021 for those who can and who did not do so in 2020.

“However, there are still a huge number of sales agreed in 2020 that are stuck in the processing logjam and awaiting legal completion, with many hoping to beat the impending tax deadline.

“For those who fail to do so, there may be difficulties if they have factored the tax savings into their budget calculations.”

It comes as a report showed that the UK’s housing market boom continues to cool as the latest lockdown restrictions send a “chill cloud” over the sector.

The scale of the rise in home-buying activity in the second half of 2020 surprised experts amid a severe economic downturn, with huge demand for home moves since the start of the pandemic and savings from stamp duty cuts.

A study by the Royal Institute of Chartered Surveyors (RICS) revealed continued momentum in December, with a majority of members experiencing growth. But the +15% net balance score shows a fifth month in a row where the majority has narrowed, with a growing proportion of firms experiencing lower demand. The figure had stood at +26% in November.

Watch: UK property: What is shared ownership?