Sellers show pricing restraint amid high competition
UK house prices continued their upward trend in February, albeit at a slower pace, as market activity remained strong ahead of the looming Stamp Duty deadline, according to the latest Rightmove House Price Index.
The average asking price for properties listed this month increased by 0.5% (£1,805) to £367,994. However, this rise is below the longer-term February average of 0.8%, reflecting a shift in seller pricing strategies as competition among vendors intensifies.
A surge of sellers entering the market earlier in the year has contributed to a record level of available stock per estate agency branch. This has reduced sellers’ pricing power, prompting many to adopt a more measured approach to avoid deterring buyers already facing higher costs.
“New sellers are showing some pricing restraint after a fast start to the year, being mindful of both the high level of seller competition, and in England also of the looming Stamp Duty deadline and extra costs for some buyers,” said Colleen Babcock (pictured far left), property expert at Rightmove.
With the Stamp Duty deadline set for March 31, buyers purchasing homes between £500,001 and £625,000 could face an additional £11,250 in tax if they fail to complete in time. Rightmove has warned of potential conveyancing bottlenecks, as an estimated 550,000 transactions are currently in progress — 25% more than this time last year. London is expected to see the most significant backlog, with first-time buyer completions up 28% year-on-year, the highest increase of any region.
Despite concerns over affordability, buyer demand remains robust. Rightmove reported that mortgage applications in January 2025 hit a record high, surging 49% year-on-year. Meanwhile, buyer enquiries are 8% higher than last year, and agreed sales have increased by 15%.
While some uncertainty remains, market sentiment has been buoyed by expectations of further interest rate cuts. The Bank of England’s recent 0.25% rate reduction has already led to sub-4% mortgage rates making a return, providing a welcome boost for affordability.
David Morris (pictured second from left), head of homes at Santander UK, acknowledged the challenges but highlighted positive developments.
“As we enter the final six weeks of lower Stamp Duty rates, the reality is that buyers starting out in their journey will need to pay potentially thousands more to own their home in 2025,” Morris said. “However, while costs are increasing on one side, there are green shoots for affordability overall, as we see the return of sub-4% mortgage rates for the first time this year.”
Chris Little (pictured second from right), chief revenue officer at finova, echoed optimism for the mortgage market, noting that lenders are already responding to expectations of further interest rate cuts.
“Today’s data should bring welcome news for the housing market, suggesting the tide is finally turning after last year’s stagnant growth,” he said. “Until recently, the market only expected two cuts in 2025, but sentiment is shifting. Investors are warming up to the idea that rates could fall sooner, and lenders are already responding.”
For Sara Palmer (pictured far right), distribution director at The Mortgage Lender (TML), February’s more moderate price growth reflects an adjustment in the market.
“February has seen a slightly more subdued property market from January, though an increase in listings and motivated buyers have kept house prices on an upward trajectory,” she said. “The property market has continued to be boosted by the stamp duty changes in the Autumn Budget as first-time buyers rush to complete transactions before the deadline at the start of April.”
Palmer added that with mortgage rates declining, some hesitant buyers are moving forward, while others could benefit from speaking with brokers to prepare for future purchases.
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