Rightmove: Although asking prices in the UK reached all-time highs, Britain is now a buyer

According to Rightmove's most recent HPI report, rising property taxes are stifling the spring selling season, which indicates that a buyers' market is about to emerge

A more muted spring market is indicated by new data from Rightmove, suggesting that the housing market is still recovering from the stamp duty frenzy.

Although the first quarter of 2025 saw a surge in activity as buyers sought to finalize deals before stamp duty thresholds dropped, spring is typically a busy time of year for real estate sales. Because of this, home prices increased at the beginning of the year, but demand has since slowed, which has slowed the growth of asking prices.

The most recent Rightmove House Price Index indicates that the average price of newly listed real estate increased by 0.6 percent per month at the beginning of May and by 1.2 percent per year to 379,517. This is the slowest rate of growth since 2016, even though asking prices reached a new record high.

Price adjustments are being made by sellers because supply is currently exceeding demand. The number of homes for sale is at a ten-year high, according to Rightmove, but demand from new buyers decreased in April, falling 4% from the same month in 2024.

This month marks the first time that buyer demand has dropped below that of the previous year. Demand is still 3% higher this year than it was last year, though. On the other hand, there are now 14% more new properties listed for sale than there were at this time last year. With the number of available homes at a ten-year high, this indicates that we are currently in a buyer's market.

While pointing out that the number of sales agreed upon in the last month is still 5% higher than at this time last year, Rightmove stated that proper pricing is crucial.

Additionally, according to the analysis, the number of sellers who have switched estate agents in an attempt to find a buyer has increased by 32%.

Rightmove property expert Colleen Babcock stated: "This month's price record is another one, but since May has set a price record for the past five years, it seems to be more influenced by seasonal factors, as demand from new buyers has decreased.

"Sellers must be mindful of the amount of competition they face for buyers' attention and the prices being advertised in their area due to the ten-year high number of homes for sale. In the current market, buyers might have a number of comparable homes in their neighborhood to pick from, so a house that seems too expensive in comparison to the competition might not be given another look.

The fact that this month's price increase is the lowest in May in nine years indicates that the market is more buyer-friendly and muted than usual.

In 2025, will home values decline?

As buyers adjust to higher property taxes on their purchase, many analysts predicted that house price growth would slow following stamp duty changes.

The Bank of England's recent interest rate cuts, however, have raised expectations among buyers for lower mortgage rates, which may increase demand and drive up prices.

In 2025, Rightmove projects a 4% increase in asking prices.

In terms of sold prices, Zoopla projects a 2.5 percent increase by year's end.

Due to interest rate reductions, real estate company Knight Frank recently increased its price growth projections for this year from 3 percent to 2.5 percent.

However, it has expressed less optimism about prime central London and cautioned that demand may be flat as a result of higher taxes and the termination of non-dom status.

Markets are pricing in two to three more cuts this year, which means fixed-rate mortgages are becoming more affordable, according to Tom Bill, head of Knight Frank's UK residential research. Whether the cuts are implemented or inflation eventually drives up borrowing costs once more, it should support demand in the UK housing market this spring.

"It's not surprising that April saw a lull in market activity as many of those who wanted to move home did so before stamp duty increased from 1 April," said Toby Leek, president of estate agent brand NAEA Propertymark.

Nonetheless, the market and prices are still strong in the long run, and with the introduction of better mortgage products, buyers are finding more financial flexibility, which keeps the housing market's cogs turning and, consequently, the economy as a whole.