House prices rise as buyers beat stamp duty deadline

The average cost of a home across England and Wales grew by £2,500, equivalent to a 0.7% rise to reach £357,300 in February, one index reveals.

The analysis from the chartered surveyors e.surv, shows that the price rise marks the second consecutive month of growth.

And that, the firm says, hints at a strengthening housing market which is being boosted by improved household budgets and declining mortgage costs.

Prices still lower than 2022

Rob Owens, e.surv’s head of research, said: “Despite these gains, annual prices are still £9,000, or 2.5%, lower than a year ago and well below the peak of late 2022.

“The increase in transactions in January and mortgage approvals in February indicates ongoing market activity, with expectations of further rate cuts this year potentially sustaining this momentum, even with the upcoming stamp duty changes.

“Buyers continue to enter the market, suggesting strong pent-up demand.”

He added: “The recent market recovery has been widespread, with many areas seeing price increases for the first time in over two years.”

Geographic divide for prices

The data shows there is a noticeable geographic divide in price rises with Wales, the Midlands and the North are showing improvement.

Prices in southern England, particularly London and the South East, continue to struggle.

Mr Owens said that it’s unlikely that the upcoming Spring Budget will deliver a housing stimulus because of budget constraints.

Households rushing to move

The recent boost stems partly from households rushing to move before April when stamp duty will rise in England and Northern Ireland.

Research shows that the stamp duty deadline has spurred sales activity, with January witnessing a spike in transactions and February showing robust mortgage approvals.

Looking ahead, e.surv says that anticipated reductions in interest rates this year could maintain activity – unless there are tax hikes unveiled by the government.

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