BLOGS

A market finding its feet

After a prolonged period of subdued activity, the UK sales market is showing early signs of stabilising. Lloyds Banking Group's house price commentary, Nationwide's monthly index and the official UK House Price Index (based on HM Land Registry completions) have each pointed to modest annual growth in the low single digits, a marked contrast to the flat-to-negative readings seen through much of the recent downturn.

None of this points to a return to the rapid price growth of 2021-2022. Rather, it looks like a market recalibrating around higher borrowing costs, with buyers and sellers gradually converging on realistic pricing. REalyse data across price paid and asking price trends shows this convergence playing out unevenly by region and property type, which matters more to professional participants than the headline national number.

At the same time, renewed political discussion around stamp duty land tax (SDLT) - including speculation about threshold adjustments and potential structural reform - has injected a fresh variable into buyer and seller behaviour. For institutional investors, developers and lenders, the combination of a stabilising price backdrop and policy uncertainty makes this a moment to look closely at the data rather than rely on sentiment alone.

What the headline indices are actually showing

The picture across lenders' indices and the official HPI is one of gradual, uneven recovery rather than a sharp rebound:

• Annual price growth has moved back into positive territory in most recent readings, typically in a range of around 1-3% year-on-year, though this varies by index methodology and lag.

• Regional divergence remains wide. Northern England, the Midlands and parts of Scotland and Wales have generally outperformed London and the South East on annual growth, continuing a rebalancing trend that has persisted since rates began rising.

• Transaction volumes remain below pre-2022 norms, even as pricing firms up - a sign that activity, not value, is the market's main constraint right now.

• Sold price per square foot, tracked at postcode and local authority level in REalyse, shows some markets achieving values close to or above asking, while others still carry meaningful asking-to-achieved discounts - underlining that "the market" is really dozens of local markets moving at different speeds.

For agents and valuers, this divergence is the key operational takeaway: national headlines are a useful signal of direction, but pricing and marketing strategy still needs to be set against granular local comparables, days on market, and discount-to-asking trends rather than the national average.

Days on market and buyer confidence

Alongside price, liquidity indicators matter for gauging whether this is a genuine turning point. Days-on-market figures across active listings have been gradually shortening in several regions after peaking during the higher-rate period, suggesting improving buyer confidence and a narrowing gap between vendor expectations and what buyers are willing to pay. Lenders assessing collateral risk, and developers timing scheme launches, should treat sustained falls in time-to-sale - rather than a single month of price growth - as the more reliable evidence of a durable shift.

Stamp duty back in the political spotlight

The renewed uptick in prices has coincided with growing political debate over stamp duty reform. Discussion has ranged from adjusting thresholds to offset fiscal drag as prices rise, to more structural proposals such as shifting some of the tax burden from buyer to seller, or replacing elements of SDLT with alternative property tax models. None of these proposals has been confirmed as government policy, but the debate itself is already shaping behaviour.

This matters because stamp duty has repeatedly proven to be one of the most behaviourally significant levers in the UK sales market. Previous threshold changes have produced sharp, short-term surges in transaction volumes as buyers rush to complete ahead of a deadline, followed by an equally sharp lull once the change takes effect. Institutional investors and developers active in build-to-sell schemes should factor this pattern into completion scheduling and sales pipeline planning, particularly for schemes targeting first-time buyer or upsizer price points most sensitive to SDLT thresholds.

For lenders and brokers, the risk is less about the direction of any eventual reform and more about the uncertainty itself: buyers weighing a purchase today against the possibility of a more favourable (or less favourable) tax position in months to come may pause, distorting near-term transaction data independent of underlying demand.

What this means for developers, investors and lenders

Three practical implications stand out for professional market participants:

• Underwriting and GDV assumptions should continue to be built on granular, local comparables rather than national HPI growth rates, given how wide regional dispersion in achieved price and £/sqft remains.

• Development and disposal timing around any confirmed stamp duty change window deserves particular attention - historical precedent suggests transaction volume pull-forward and subsequent softness are likely, and planning pipeline data can help identify which local markets have the supply in train to absorb a demand surge versus those at risk of oversupply into a lull.

• Lending risk assessment should weight the sustainability of the current uptick - driven partly by base rate expectations and pent-up demand - against the risk that a badly-timed stamp duty announcement could reintroduce volatility into transaction volumes even if pricing holds.

Outlook

The combination of stabilising price growth and live stamp duty debate does look like the ingredients of a turning point, but not yet confirmation of one. Price data is trending in the right direction, and improving days-on-market figures in several regions support the idea of firmer buyer confidence. However, transaction volumes remain the market's soft spot, and any stamp duty announcement - whatever its final shape - is likely to introduce a period of short-term distortion before a clearer trend re-emerges.

For developers, investors, agents and lenders, the sensible approach is to treat this as an inflection point worth monitoring closely at the local level, using granular price, yield and pipeline data to separate markets genuinely turning a corner from those simply catching a national tailwind.