Rightmove: The market responds to higher stamp duty costs by lowering asking prices in the UK

Due to a shortage of supply, sellers are entering the market with lower asking prices in an effort to draw in buyers

According to Rightmove, the delayed reaction to stamp duty threshold changes has resulted in a decline in asking prices for homes in the UK.

Since more people are viewing properties due to the warmer weather, which typically drives up house prices, the real estate market is typically strong during this time of year.

However, as buyers tried to outbid one another for stamp duty threshold changes in April, a large portion of market activity was pushed to earlier this year, pushing asking prices to all-time highs.

As buyers adjust to the new pricing, Rightmove claims that this has caused a lull in which there is now an excess of inventory and decreased demand.

According to the real estate website's most recent House Price Index, between May and the first few weeks of June, new seller asking prices decreased by 0.3 percent.

The average asking price was 378,240 after annual growth slowed from 1 point 2 percent to 0 point 8 percent.

According to Rightmove, this is an unusual decline for June as new sellers reduce their price expectations in the face of ten-year-high competition for buyers.

Over the previous ten years, the average June increase has been 0.4 percent.

The index shows that buyer demand is now 3% higher than it was at this time last year, while the number of homes appearing on the market is 11% higher.

Due to the abundance of buyer options and the price sensitivity of the market, selling requires realistic pricing.

Rightmove property expert Colleen Babcock stated: "It seems that the recent stamp duty hikes in England and the decade-high number of homes for sale are having a delayed effect on the prices of new sellers.

Since the new records were set in April and May, prices have decreased this month.

It appears that many people are paying attention to and acting upon the advice of agents, who have been telling us that in order for sellers to have a better chance of finding a buyer in the current market, they must set a competitive price. In the upcoming months, this kind of reasonable pricing will be crucial. We can observe regional differences in price changes this month beneath the headline numbers, which seem to be closely related to supply levels and buyer affordability.

Is this a favorable moment to sell a home?

After stamp duty thresholds were altered, many analysts predicted a decline in housing market activity as buyers had to adapt to higher property taxes.

Prices have increased most this month in the more affordable North West, Wales, and Yorkshire and the Humber, while the biggest price decreases have occurred in the more expensive South West, South East, and London regions where stamp duty will have had a greater impact. Stamp duty hikes have less of an impact on these areas and, in the case of Wales, none at all, according to Rightmove.

Even though inflation is still high, some buyers will have benefited from declining interest rates, which increased buyer affordability.

However, when properly priced, properties are selling.

According to Rightmove, the strongest month of agreed sales since March 2022 was May, indicating that more competitive pricing is boosting sales activity.

The impact of entering the market with a competitive price, a compelling description, and eye-catching photos that prompt a potential buyer to request a viewing right away is demonstrated by Rightmoves data.

According to the real estate website, properties that get an inquiry on the first day of marketing have a 22% higher chance of finding a buyer than those that wait more than two weeks.

"There is a good selection of houses for sale, which indicates that buyers have good negotiating power," Babcock continued. In the current high-supply market, some buyers who have a house to sell might be able to get a lower price for it on their own, but they might try to make up for it by negotiating a similar discount on their purchase.

It's encouraging that many people are using effective sales techniques because sales are not only at a good level but are at their highest level since March 2022. According to Rightmove's analysis, homes that are promoted as efficiently as possible and priced appropriately at the outset will attract the crucial early interest that significantly raises the chances of finding a buyer.

Speaking about the index, Toby Leek, president of the estate agent trade association NAEA Propertymark, stated that while this slight decline in home values is welcome, it is most likely the result of the backlash against the stamp duty hike.

He stated: "This decrease in home values will be offset by the tax hike for a significant portion of first-time purchasers. As first-time homebuyers require a deposit of approximately £60,000 to purchase a home, many will require additional assistance in the future to climb the property ladder.