Agreed UK property sales ahead of stamp duty rise

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Agreed UK property sales rose by almost a third year-on-year at the end of 2024 as buyers rushed to avoid the rise in stamp duty from next April, according to data from Zoopla.

An investigation by the real estate portal reported on Monday that as of December 14 there were 283,000 sales agreed but not yet completed, the largest sales pipeline in four years and an increase of 30 percent compared to the end of 2023.

Buyer inquiries increased by 21 percent in December compared to the same period last year. The company attributed the two trends to the increase in stamp duty, which was set by chancellor Rachel Reeves in her October budget.

Richard Donnell, chief executive of Zoopla, said: “There is a sizeable sales pipeline to be completed in the first half of 2025 and many are hoping to avoid higher stamp duty costs from next April.”

“Buyers and sellers returned to the real estate market in 2024 having delayed their movements due to the increase in mortgage rates,” he added.

Reeves confirmed in the Budget that a temporary stamp duty holiday would end in March. As a result, first-time buyers, for example, will start paying the tax from April 2025 on properties valued at £300,000 or more, rather than the current £425,000.

Anticipation of changes to the stamp duty regime helped lift mortgage approvals to their highest level since August 2022 in October, according to separate data published by the Bank of England.

Matt Thompson, head of sales at Chestertons, said the estate agency was “experiencing one of its busiest Decembers in years in terms of buyer demand”.

“This is mainly due to first-time buyers who are keen to get on the property ladder ahead of next year’s stamp duty changes, but also second-time buyers, including young families, who are looking to upsize,” he added.

UK house prices rose 3.7 percent year-on-year in November, the fastest annual growth since November 2022, according to separate data released by Nationwide in early December.

Zoopla reported a further acceleration of annual house price growth in December, compared to the previous month. But it also noted that buyers became more price-sensitive after the Autumn Budget and amid growing uncertainty over the outlook for mortgage rates.

Buyers paid on average 3.6 per cent less than the asking price for a property in December, Zoopla data showed, down from 3.2 per cent in the summer.

Mortgage rates have risen since November on concerns about persistent inflation, raising expectations in financial markets that the Bank of England will be cautious in cutting interest rates next year.

The central bank kept its benchmark rate at 4.75 percent last week, after two cuts since the summer. After the latest vote, Bank of England Governor Andrew Bailey said “increased uncertainty in the economy” meant policymakers could not “commit to when or how much we will cut rates over the next year.”

Zoopla expects UK house prices to rise by 2.5 per cent in 2025. Thompson forecasts growth of 3.4 per cent, saying “improving affordability, pent-up demand and renewed confidence in “The market should support constant growth in property values.”