These are popular with first-time buyers, who currently pay no stamp duty on the first GBP425,000 ($723,775) of a purchase.
With the threshold for paying the levy set to sharply drop in April, owners of starter homes in higher-priced areas are seeking to take advantage of strong demand and in turn purchase bigger homes.
The South East — England’s second most expensive property market after London — saw a 16% increase in places put up for sale.
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However, Rightmove warned of a looming cliff edge, with the property market facing a “potential dampener” beyond the first quarter. “A lot depends on how quickly normal activity is resumed,” said Tim Bannister, its director of property science.
The rush to beat the deadline is boosting a market that has gained momentum in recent months. On Friday, the Royal Institution of Chartered Surveyors said its closely-watched gauge of house prices hit its highest in over two years in November.
Rightmove said asking prices for first-time buyer properties are holding up better than for average homes. Across the market, they fell 1.7% in December, in line with long-term trends, to GBP360,197. The housing market typically rebounds at the end of December when new buyers return after the Christmas holidays.
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Home prices are ending the year 1.4% above levels seen a year ago, and are forecast to rise 4% in 2025 if anticipated cuts to mortgage rates materialise, Rightmove said.
While the Bank of England has helped prospective buyers by cutting borrowing costs this year, rate-setters have signaled a cautious approach going forward. That has pushed up fixed-rate mortgages, which have settled above 5%.
Experts cautioned that Labour’s budget looms large over a housing market outlook where affordability remains stretched. Employers are already posting fewer vacancies and restraining pay as they prepare for a big increase in payroll taxes, according to a recent report from the Recruitment & Employment Confederation.
“Looking at our data and the UK’s underlying housing needs, there are lots of reasons to be positive about next year,” Bannister said. “However, as we’ve seen several times this year, the market is sensitive to unexpected events and the direction of travel can change.”
Charts: Bloomberg
