Growing speculation about a capital gains tax (CGT) raid in October’s budget appears to have prompted a surge in the number of larger homes being put up for sale, the UK’s biggest property website says.
Rightmove said in the week ending 9 September there had been “a flurry of activity at the top end” of the market. The number of larger homes – defined as four-bedroom detached houses and all five-bedroom and larger properties – being listed for sale in Great Britain was 15% more than in the same period last year. And in the east and south-west of England, which include some of the UK’s most popular coastal and countryside hotspots, the percentage was over 20%.
The Guardian has reported that raising more money from CGT was one of the changes the chancellor, Rachel Reeves, was believed to be considering in the 30 October budget. With speculation intensifying, the Resolution Foundation thinktank on Tuesday urged Reeves to announce CGT and other tax changes to raise billions of pounds.
Rightmove said various factors could be causing the increase in owners of larger homes wanting to sell. One was falling mortgage rates following the Bank of England’s 1 August interest rate cut, and the expectation of more to come.
“Another factor is increasing speculation around a CGT rise,” the website said. “In addition to landlords, second homeowners of larger homes, in particular, could be hit by any increase to CGT, which may be leading some to cash out now.”
The report’s findings come a day after Rightmove rejected a £5.6bn offer from the Rupert Murdoch-owned property firm REA, saying it “fundamentally undervalued” the portal and its prospects.
In a separate release on Thursday, the Royal Institution of Chartered Surveyors (Rics) said there had been an increase, albeit a modest one, in the number of homes for sale, “with reports … suggesting this will continue”.
In its latest monthly survey, the surveyors’ trade body said the housing market was showing promise. “Buyer demand and sales activity are on the rise, with industry professionals anticipating further growth as we move into the final quarter,” it said.
Its data covering August showed more people were looking to buy a home, and that house prices were starting to increase “after almost two years of decline”.
However, Simon Rubinsohn, the Rics chief economist, said uncertainty surrounding further interest rate cuts and the forthcoming budget were “keeping the mood in check”.
The two most recent house prices surveys from Halifax and Nationwide have painted a picture of a reasonably robust property market.
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Earlier this month Halifax named Manchester as the “first-time buyer capital of Britain”, because those taking their first step on the property ladder accounted for 75% of home purchases with a mortgage in the city last year.
Another big lender, Santander, has analysed the hotspot neighbourhoods for first-time buyers, and said they included the borough of Waverley in Surrey, the London borough of Waltham Forest, which includes Walthamstow and Chingford, and Bassetlaw in Nottinghamshire.
Using data from 2013-2023, Santander analysed which neighbourhoods had seen the biggest increase in the number of first-time buyers. Other “top rising neighbourhoods” included Harlow in Essex and Knowsley in Merseyside.