A leading agent says the increase in stamp duty on additional homes from 3% to 5% announced at the Budget has triggered renegotiations on the prices of homes for sale.

Jeremy Leaf, north London agent and former chairman of residential RICS, says: “Concerns over the budget have created some uncertainty among our buyers and sellers, but many have hit the pause button rather than the stop button. The underlying sentiment is that interest rates will remain relatively stable or even fall slightly over the coming months, which has supported confidence and activity.

“Stamp duty increases for second home buyers and landlords have resulted in some renegotiation of previously agreed prices. But any slight decline was offset by new interest from first-time buyers keen to take advantage of the availability of competitively priced properties and changes to their own stamp duty next spring.

Holly Tomlinson, financial planner at wealth management service Quilter, says the stamp duty increase is also expected to hurt the tenant with rent increases due to too few investors choosing to buy.

“The government’s new additional 5% stamp duty on second homes marks a bold move to curb demand from rental investors and second home buyers. The policy aims to make primary home ownership more accessible, particularly in popular areas where property prices have soared due to demand for rental and holiday properties.

“However, with rental investors potentially being excluded, the supply of rental housing could tighten further, particularly in already competitive urban areas, fueling soaring rental prices.” »

They were making their comments in response to the latest Halifax Index, which showed that average UK house prices rose by 0.2% in October.

This brought the annual growth rate to 3.9%, slightly lower than in September. The average house price has reached a record high of £293,999, surpassing the previous high of £293,507 set in June 2022, towards the end of the pandemic-era ‘space race’.

Amanda Bryden, Head of Mortgages in Halifax, says: “That house prices have reached these highs again in the current economic climate may surprise many, but what is perhaps more remarkable is that ‘They didn’t fall very far in the first place. .

“Despite the challenges of rising interest rates, house prices have generally stabilized over the past two and a half years, recording an overall increase of 0.2%.

“This is a significant slowdown compared to the 21% increase we saw over the equivalent period from January 2020 to summer 2022.

“Despite the affordability challenge, market activity has improved. The number of new mortgages granted recently reached its highest level in two years. This corresponds to the steady decline in average mortgage rates since the spring – now more than 160 basis points lower than in the summer of 2023 – coupled with continued positive income growth.

“Going forward, borrowing constraints remain a challenge for many buyers. After the budget, markets expect the Bank of England to cut rates more slowly than expected, which could keep mortgage costs high for longer. New policies such as higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers could also affect demand.

“While we expect house prices to continue to grow, it will likely be at a modest pace for the remainder of this year and next year.”

According to the Halifax, Northern Ireland continues to record the strongest growth in house prices of any country or region in the UK, rising 10.2% on an annual basis in October.

The average price of a property in Northern Ireland is now £204,242.

House prices in Wales also recorded strong growth, up 5.6% from the previous year, with properties now costing an average of £225,543.

Once again, Scotland saw a more modest rise in house prices, where a typical property now costs £206,480, 1.9% more than the previous year.

The North West remains the fastest growing region in England, up 5.9% from last year to £235,587.

London continues to have the most expensive house prices in the UK, now averaging £543,308, up 3.5% from last year.