Asking prices listed by new sellers have fallen by 1.7% to £360,197 in December as the Christmas lull takes over the market.
According to Rightmove’s latest House Price Index, asking prices will still end the year 1.4% higher than December 2023.
Newly listed prices, meanwhile, are forecast to rise by 4% next year as further mortgage rate drops are expected to improve borrower affordability and stimulate the market.
Despite the festive lull, however, activity remains substantially stronger than the same period a year ago, with the number of sales agreed up by 22% and new buyer demand up by 13%.
Rightmove says some movers are now shelving their plans to look for a home until Boxing Day. Coined the ‘Boxing Day bounce’, last year a record number of sellers listed their homes the day after Christmas, while buyer demand jumped by 237%.
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Stamp duty expected to dampen market
Looking ahead to 2025, Rightmove says challenges remain.
The looming stamp duty deadline in England is a potential dampener for some movers in 2025.
In October’s Autumn Budget, Chancellor Rachel Reeves did not extend the temporary increase to the stamp duty thresholds introduced in 2022, which means they will expire at the end of March 2025.
Once this ends, first-time buyers will pay stamp duty on the portion of any purchase above £300,000, rather than £425,000. For all other buyers, stamp duty will be payable on property above £125,000 instead of the current £250,000.
Rightmove’s latest snapshot of data has identified signs that sellers of smaller properties in higher-priced areas are trying to trade up or sell up before the deadline to avoid the higher stamp duty charges, despite now needing to act quickly.
Impact seen in London and South East
In the last four weeks, the number of sellers of typical first-time buyer homes with two bedrooms or fewer in London coming to market is up by 20%, the most of any regional market sector. In second place is the South East at +16%, which is also the second-most expensive region. Meanwhile, prices are holding up most strongly for first-time buyer types of properties in more affordable areas, which are set to be less affected by the stamp duty changes, as most first-time buyer homes are well under the resuming £300,000 tax threshold.
Tim Bannister, Rightmove’s director of property science, said: “New sellers in December have to work particularly hard to capture the attention of Xmas party- and festivity-distracted buyers, and the 1.7% average monthly fall is a fitting gift for those who are still buying homes rather than presents.”
He added: “Looking at our data and the UK’s underlying housing needs, there are lots of reasons to be positive about next year. However, as we’ve seen several times this year, the market is sensitive to unexpected events and the direction of travel can change. The stamp duty changes are a cloud over the market at the moment, with some groups much more impacted than others, and therefore keen to avoid the additional charges.
“After the important first three months of the year in 2025, a lot depends on how quickly normal activity is resumed with higher stamp duty in England. A bank rate cut and some mortgage rate falls early on in the year would help to settle the market and provide a boost to sentiment and consumer confidence.”
