British Real Estate Market in Transition: Price Decline and Increased Sales Activity

The British real estate market shows an interesting development in December: average asking prices for newly listed houses and apartments have fallen by 1.7%, as reported by the real estate portal Rightmove. Despite the decline, activity remains robust for this time of year, as many buyers are eager to complete sales before the planned increase in property taxes in April. This price movement reflects typical seasonal patterns and follows a 1.4% decrease in November. Compared to the previous year, asking prices have increased by 1.4%. Rightmove's data covers the period from November 10 to December 7. Overall, the number of agreed sales rose by an impressive 22%, while demand from new buyers increased by 13%. At the same time, seasonally adjusted data from mortgage providers such as Nationwide and Halifax showed monthly price increases in November and the fastest annual gains in two years. However, Tim Bannister, Head of Property Science at Rightmove, expressed uncertainty about how the upcoming increase in stamp duty will affect the market in the coming year. First-time buyers in England will be particularly affected, as they will have to pay stamp duty on properties starting at £300,000 from April, while other buyers will be charged starting at £125,000, and the tax surcharges for second homes will increase. Bannister suggested that a cut in the bank interest rate and some mortgage rates at the beginning of the year could stabilize the market and boost consumer confidence. The Bank of England is expected to keep interest rates at 4.75% on Thursday and has indicated that future rate cuts will likely occur gradually. Investors are already expecting three rate cuts of a quarter point each next year. The Labour government under Prime Minister Keir Starmer, in office since July, recently announced a revision of the planning system to accelerate housing construction and stimulate economic growth.