According to Rightmove, there has been a noticeable increase in the number of larger homes being listed for sale. This trend is attributed to a combination of falling mortgage rates and growing concerns over potential tax increases under a Labor government.
Rightmove has reported a significant increase in the number of larger homes being listed for sale in the past week, as sellers aim to capitalize on the ability of buyers to secure larger mortgages due to falling rates. The number of larger detached houses (four bedrooms or more) on the market is now 15% higher than during the same period last year.
Additionally, estate agents have noted that buy-to-let landlords are rushing to sell their properties in an effort to avoid potential future increases in capital gains tax or additional taxes on rental profits under a Labor government.
The start of September traditionally sees an increase in home listings as Britons return from summer holidays and aim to move before Christmas.
Before September, the market was predominantly seeing a rise in the number of smaller homes (two bedrooms or fewer) being listed. However, a significant shift has occurred in the past week, with a notable increase in larger homes being listed for sale.
This trend is particularly evident in the East of England, where the number of homes with four or more bedrooms coming on the market has risen by 21% compared to the same period last year. Similarly, in the South West, there has been a 20% increase in the listing of larger homes this September compared to last year.
Tim Bannister, a property expert at Rightmove, attributes the recent surge in larger homes listings to falling mortgage rates, which have been most beneficial for those with larger deposits. The lowest five-year fixed-rate mortgage has dropped from 4.28% in July to 3.77% currently.
Bannister explained that while activity in the high-end property market had been subdued earlier in the year due to high mortgage rates and limited housing options, recent base rate cuts have reignited interest. This has led to a noticeable increase in the number of larger homes being listed.
Additionally, speculation about a potential rise in capital gains tax (CGT) in the upcoming Autumn Statement is contributing to the trend. Landlords and second home owners, particularly those with larger properties, may be motivated to sell now to avoid higher CGT rates in the future. Currently, CGT for higher-rate taxpayers stands at 24%, but concerns are that it could rise to 40% or even 45% if aligned with income tax rates.
The latest RICS survey highlights several key factors influencing the UK property market. Increased council tax on second homes and potential rises in capital gains tax (CGT) are contributing to a surge in property listings.
Despite these concerns, the market is showing signs of recovery. Falling mortgage rates have sparked more buyer interest, and estate agents are optimistic about a strong autumn market. Tom Bill from Knight Frank predicts that transaction volumes and prices will rise, driven by these lower borrowing costs. With expected further rate cuts, the market could continue to improve, countering the slowdown of recent years.
