Latest House Prices: December 2023's Market Update
Housing Prices Dip During Holiday Period, Yet 2023 Market Activity Proves Superior in Comparison
Those thinking of selling their property might want to reconsider, as the average new seller asking price took a 1.7% dip this month, dropping to a hefty £360,197, according to Rightmove’s house price index (HPI).
This decline mirrors the usual December slump but is less severe than the 1.9% drop observed in the same period last year. Despite the downward trend, prices have witnessed a 1.4% increase compared to this time in 2023, which Rightmove deems "broadly in line" with their forecast of a 1% rise in prices this year.
Tim Bannister, Rightmove's property science director, commented, "New sellers in December have their work cut out to entice bargain-hunting buyers, who are juggling Christmas festivities and holiday plans."
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The housing market has seen a significant boost in both sales agreed and new buyer demand, increasing by 22% and 13% respectively compared to last year. Bannister hints at the traditionally active Boxing Day period, stating, "We are looking forward to the annual Boxing Day housing market surge."
During December, the biggest monthly drops in average house prices were seen in London, Yorkshire and Humber, and the East Midlands, each experiencing falls of 3.2%, 2.5%, and 2.3% respectively. In contrast, house prices in the South West, Wales, and the North West fell by just 0.4%, 0.6%, and 0.6%, respectively.
The North East of England remains the cheapest place to buy a house in the UK, with an average house price of £186,013, despite seeing the fastest annual growth of 4.2%. Interestingly, house prices in London have fallen 0.6% year-on-year, with average house prices resting at £661,444.
Navigating Stamp Duty Changes in 2025
Rightmove’s data reveals that homeowners are already responding to the upcoming increase in stamp duty. From April 1, 2025, the nil rate threshold for Stamp Duty Land Tax (SDLT) in primary residences will revert to £125,000, as opposed to the current £250,000.
The threshold for first-time buyer SDLT relief will also decrease from £425,000 to £300,000, and higher rates will apply to properties over £500,000. These changes are expected to impact buying decisions and potentially lead to a slowdown in the housing market.
Steven Holden, director at Holden Copley, said, "The market has been robust in 2023, but we remain aware of challenges ahead, such as the anticipated impact of stamp duty returning to previous levels in April."
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Sources:1. COVID-19 and the Housing Market: Evidence from U.K. Property Transactions (BofE)2. Stamp Duty Holiday: Lessons for a Post-Crisis Recovery (Resolution Foundation)3. The UK Housing Market and Stamp Duty Land Tax (Royal Institute of Chartered Surveyors)4. Stamp Duty Changes: Impact on the Property Market and House Prices (Zoopla)5. The Impact of Stamp Duty on House Prices (Office for Budget Responsibility)
- In light of the impending changes in stamp duty, careful deliberation in financing and investing in real estate might be crucial as it could potentially impact purchasing decisions and lead to a slowdown in the housing market.
- As the property market navigates through the implications of stamp duty changes in 2025, including the reversion of the nil rate threshold for Stamp Duty Land Tax (SDLT) in primary residences to £125,000, understanding the financial ramifications on housing-market trends and house prices will be essential for those looking to invest in property or sell their homes.
