Landlords leave the market as buyers rush to beat stamp duty changes

The New Year will see buyers race to beat stamp duty changes and more landlords selling up, according to Propertymark’s latest Housing Market Insight report.

Propertymark reveals that despite static rental prices, many landlords are struggling to break even as rising mortgage rates and costs force rent increases to cover expenses.

The report reveals demand still continues to outpace supply with the average number of applicants per member branch still hitting around nine people for each available property.

Landlords selling up

According to the report, in October 2024, 55% of member agents reported that rents remained generally static, with 17% reporting they had seen an overall fall, and nearly 27% reporting they felt rents had increased.

Rental arrears dipped slightly in October but remain high, with 35% of adults reporting it is ‘very or somewhat difficult’ to afford their rent or mortgage payments.

One Propertymark agent in the East of England told the report that many landlords are thinking of exiting the market when the New Year begins.

The agent said: “Even in view that we are still at the very early stages of the Renters’ Rights Bill making its way through parliament, I am getting calls from landlords who are already considering selling up and getting out of the lettings market.”

Lack of support for investors

Nathan Emerson, chief executive of Propertymark, says despite some positive trends in the lettings market, supply and demand imbalances remain a big issue.

He said: “In the lettings market, some positive trends are emerging despite the continued problematic landscape of undersupply and rising demand. Agents report a healthy number of rental properties on their books that currently are not witnessing widespread rental increases.

“This has been a key issue due to landlords’ raised mortgages and other costs requiring them to push up rents to, in many cases, so they just, break even.

“We continue to raise concerns regarding the lack of support for investors, as demand from renters continues to rise against a backdrop of static stock levels.”

Buyers rush to beat stamp duty change

In the residential market, the number of new prospective buyers reached a two-year high in October 2024, with an average of 100 new buyers registered per member branch.

According to the report, the estimated number of UK residential sales transactions in October 2024 was 23% higher than in October 2023.

Sales look set to rise as buyers rush to complete transactions before the stamp duty change in April next year.

From April 2025, stamp duty thresholds in England will be lowered. For first-time buyers, the exemption threshold will drop from £425,000 to £300,000, while for standard residential properties, it will fall from £250,000 to £125,000.

Mr Emerson adds: “As we head into the New Year, the sales market is set to see a trend unlike those historically seen across the winter months, with buyers and sellers, especially across England and Northern Ireland, pushing their sales and purchases through to save potentially thousands of pounds before the changes to Stamp Duty thresholds take effect from April 2025.

“Affordability continues to improve for many across the country and with that, so has activity. Prices may fluctuate to align with home movers’ desires and budgets, and we expect to see a healthy and adaptable market in 2025.”

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