A growing trend in the UK’s property market has seen one-third of homes for sale now chain-free, as landlords and second-homeowners look to sell.
- House sales have surged by 25% over last year, attributed to an increase in new listings amid tax change fears.
- Falling mortgage rates, now at 4.3% for a five-year fixed deal, fuel this rise in market activity, motivating sellers.
- Homes in London are commonly chain-free, with two- and three-bedroom houses leading, indicative of them being ex-rentals or second homes.
- Tax changes, including potential increases in capital gains tax, are driving landlords to sell, particularly along coastal areas.
According to recent insights from Zoopla, the UK’s property market is witnessing a significant transformation, with one-third of homes for sale now chain-free. This shift is primarily driven by concerns over imminent tax changes affecting landlords and second-homeowners. These sellers are proactively offloading properties to preempt potential increases in capital gains taxes.
House sales have seen a remarkable increase of 25% compared to the previous year. This surge is partly fueled by a wave of new property listings as homeowners who had postponed moving for the last two years are now entering the market. Furthermore, with mortgage rates decreasing to an average of 4.3% for a five-year fixed loan, the property market has become significantly more dynamic. These rates are at their lowest since May 2023, offering sellers a timely incentive to list their properties.
In London, the majority of chain-free properties are two- and three-bedroom houses, often previously rented or used as second homes. Outside the capital, one- and two-bedroom flats are most prevalent in the chain-free market. Approximately 13% of all new listings were formerly rented properties as landlords seek to divest in anticipation of fiscal changes.
The potential tax amendments are particularly concerning for landlords, with speculation centered around an increase in capital gains tax rates, which currently stand at 18%. Further exacerbating this situation, several local councils are planning to double council taxes for second homes, set to take effect next year. This has led to an influx of properties being listed in coastal locales such as Truro, Torquay, Exeter, and Bournemouth, where a 40% increase in listings has been observed.
Richard Donnell, Zoopla’s executive director, emphasizes that the combination of ongoing tax speculation and prior legislative changes has expanded the housing supply. “More supply delivers much greater choice for buyers and will keep house price inflation in check into 2025,” he notes. Despite these developments, the UK has experienced a modest house price increase of 0.7% over the past year, significantly lower than the 3.2% rise reported by Nationwide.
Price trajectories vary across the UK, with regions such as the South West, South East, and East of England facing price declines due to affordability challenges. Conversely, Northern Ireland has seen a marked increase of 5.7% in house prices, with the northwest of England also witnessing a 2.1% hike over the past year. Looking ahead, Zoopla forecasts a continued but tempered rise in house prices, driven by the increasing supply of homes on the market.
The UK’s property market is evolving rapidly, with chain-free properties becoming more prevalent as tax anxieties prompt a surge in listings.
