Overview

The withdrawal of stamp duty concessions at the end of March caused a lull in activity; in April there was a 10% fall in applicants registering to buy at estate agency branches across Great Britain. But this quiet period did not last long.

In May, demand recovered with a 3% year-on-year rise. By June, applicant numbers were up 11% year-on-year, as first-time buyers and upsizers returned to the fray. London homes went under offer more rapidly than those elsewhere, marking a change from the sluggish pattern of trading seen in recent years.

During the month, more would-be buyers (or applicants) registered with a branch than in any other June since 2022. Applicant numbers rose most sharply in London - up 18% year-on-year. The South East and East of England followed with increases of 14% and 13% respectively.

The downward move in mortgage rates lies behind this revival. Lower mortgage rates are boosting househunters' purchasing power, in most cases compensating for larger stamp duty bills.

" More would be buyers (or applicants) registered with a branch than in any other June since 2022. "

First-time buyers are benefiting most from the cuts to mortgage rates since the cost of higher-loan-to-value deals has fallen more sharply than that of other types. For example, according to Bank of England data, the average rate on a 90% loan-to-value mortgage fell from 5.65% in June last year to 4.78%. Lenders are also applying more favourable affordability assessments to these borrowers.


But the tempo in the priciest parts of London and the other prime markets remains more subdued. Sellers in these locations are typically more discretionary, unlikely to be compelled by circumstances to put their homes on the market. They are willing to wait until prices rebound. As a result, just 27% of the properties that changed hands for more than £1 million a decade ago have subsequently been sold. This compares with the nationwide average of 40%.

One group is yet to return to the market. In June, 10% fewer second home buyers registered than did so the year before. Their numbers are now at their lowest level in more than five years. This predominantly reflects higher council tax and stamp duty costs.

Pricing

The beneficial mix of more competitive mortgage deals and more house hunters is supporting prices. The average property in England and Wales sold for 98.9% of its final asking price last month, up from 98.7% in June 2024. In pound terms, this translates into a median discount of £2,000.

In June, just 13% of homes in England & Wales fetched 5% less than their final asking price. This is the lowest level since September 2022, ahead of the Liz Truss mini-budget which drove up the cost of mortgages.


Just 3% of buyers succeeded in knocking 10% or more off a home's asking price. But, in the £1 million-plus category, price cuts of 10% or more were easier to secure. As many of such homes sold for 5% less than their final asking price in June – up from 5% in June 2024.

Meanwhile, homes sold for between £500k and £1m, typically bought by upsizers in the south of England, saw the biggest decline in discounting.

Time To Sell

Demand may have improved, but there were 3% more homes on the market in June than the same month last year – and stock levels were 41% higher than in 2019. This means lots of choice and an extended time to sell.

The average property that went under offer in June had been for sale for 56 days. This compares with 48 days in June 2024.

Only 30% of properties found a buyer within 30 days, the lowest proportion recorded in any June since 2020. Homes sold over £1m recorded the biggest increase in the length of time on the market. They took an average of 78 days to find a buyer - 30 days longer than in June 2024.

However, in a reversal of the trend that became established between 2016 and 2024, London homes are more likely to go under off er within a month than the average for Great Britain. About 32% of homes sold in London in June went under offer in less than a month.

" But the tempo in the priciest parts of London and the other prime markets remains more subdued. "

Partly for this reason, London is one of only two regions where there were fewer homes on the market than last year, stock is 13% down on its 2024 level. This has limited buyers' choice, particularly in the suburbs.

But Scotland leads the league. As many as 54% of homes that were on the market found a buyer within 30 days, against 50% in June last year. This is twice the pace of other regions.