Landlords and second homeowners rush to sell – Zoopla

The UK property market is witnessing a surge in landlord and second-homeowner properties for sale as they race to offload their homes ahead of anticipated tax changes, Zoopla reveals.

Its latest house price index highlights the looming threat of higher taxes that might be announced in this month’s Budget.

The prospect has prompted a wave of sellers to act to avoid potential capital gains tax and council tax increases.

Zoopla says that a third (32%) of homes listed on its site are being offered ‘chain-free’.

The most common chain-free homes are two-bedroom houses, with 41% of listings falling into this category.

Previously rented properties accounted for 13% of homes for sale on Zoopla.

Possible tax changes in the Budget

Richard Donnell, an executive director at Zoopla, said: “Speculation over possible tax changes in the Budget and the impact of previous tax changes are continuing to add to the growth in the number of homes for sale.

“Lower mortgage rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years.”

He added: “We remain in a buyers’ market and greater choice of homes for sale will keep house price inflation in check into 2025.”

Rush to sell BTL properties

Commenting on Zoopla’s data, Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “Owners are falling over themselves in a rush to shift holiday homes and buy to let investment properties.

“They’re panicking that changes that might come through in the Budget could saddle them with a huge tax bill on their gains, making property investments even less attractive from a tax perspective.

“There’s every chance investing in property has hit them with endless tax and legislative challenges – some of which they never expected.”

She adds: “The additional tax burden starts when you buy and pay a stamp duty surcharge. Then, as you go along, there’s tax to pay on any rental income, and the rules have changed so you can offset less of your mortgage costs.

“The income tax may also be rising, thanks to frozen income tax thresholds which mean more people paying higher rates of tax.”

Lowest mortgage rates in 15 months

Zoopla also reveals that the UK property market is experiencing a resurgence as falling mortgage rates entice buyers back into the market.

Sales agreed and buyer demand have surged by over a quarter in the past four weeks compared to the same period last year.

This marks a major turnaround for the market, which has been subdued in recent years due to rising interest rates.

Sales are up by over 10% in all regions, with the East Midlands and North East leading the way with increases of 30% or more.

Affordability is a price constraint

Coastal and rural areas popular with second homeowners, such as Truro, Torquay, Exeter and Bournemouth which have seen supply increase by more than 40% due to the impending tax changes.

Affordability continues to be a constraint on house price growth, especially in southern England.

While London prices have rebounded from a year ago, they are still lower than in the South West, South East and Eastern regions.

However, in the rest of Great Britain, house price growth is higher than a year ago, with prices up to 2.5% higher.

Home values in Northern Ireland are 5.5% higher, having underperformed the rest of the market in recent years.

Reaction from housing market experts

Nathan Emerson, the chief executive of Propertymark, said: “It’s positive to see further growth within the housing market.

“2024 has been a year of progression that has seen changes within the wider economy help uplift the ability for people to approach the marketplace with a new level of assurance.

“We are starting to see early signs of lenders having the confidence to shift up the landscape by offering sub-four per cent mortgage deals in some circumstances, which of course sits firmly below the current base rate and points towards future confidence within the economy.”

Nigel Bishop, of Recoco Property Search, said: “Second homeowners and buy to let investors are facing drastic changes as some local authorities have or are going to start charging double council tax for properties that are left empty for more than a year.

“We are seeing more second homeowners contemplating if maintaining their holiday home remains a sound financial investment.

“If a substantial number of second homes is being put up for sale, we could see the property market in areas such as Cornwall become increasingly attractive to house hunters who are seeking a permanent residence but are currently priced out of the market. That being said, a lot of properties are being offered at considerably high asking prices and sellers will need to adjust their expectations.”

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