Third of homes for sale are chain-free as budget looms

A third of homes currently up for sale are chain-free as landlords and second-home owners look to sell amid fears over possible capital gains tax changes.
The number of house sales being agreed is up 25 per cent versus this time last year, with Zoopla, the property search website, saying that rising sales volumes are being supported by new listings coming to market.
Some of those listings are from owners who have delayed moving over the past two years but are now being tempted back by falling mortgage rates. The average rate for a five-year, 75 per cent loan-to-value mortgage is 4.3 per cent, the lowest since May 2023 and down from 5.5 per cent 12 months ago, according to Bank of England data.
However, Zoopla’s data shows that a significant proportion of new homes coming up for sale are the result of landlords and second-homeowners selling up. In London, two and three-bed houses are most likely to be chain-free, usually meaning they are not owner-occupied, while outside the capital it is one and two-bed flats.
About 13 per cent of all homes currently listed for sale were previously rented, with landlords selling up because of higher buy-to-let mortgage rates and the prospect of looming tax changes. The expectation is that the new government will use its first budget at the end of this month to increase capital gains tax on residential property from its current basic rate of 18 per cent.
With many local councils planning to double council tax for second homes next year, there has been a glut of properties being put up for sale in coastal areas including Truro, Torquay, Exeter and Bournemouth with the number of properties on the market up 40 per cent in the year.
“Speculation over possible tax changes in the budget and the impact of previous tax changes are supporting the expansion in homes for sale which continues to expand,” Richard Donnell, executive director at Zoopla, said. “More supply delivers much greater choice for buyers and will keep house price inflation in check into 2025.”
Zoopla estimates that house prices across the UK have risen by only 0.7 per cent over the past year, much less than Nationwide, the mortgage lender, which calculated this week that prices are up 3.2 per cent. The difference is partly because Nationwide’s index recorded a sharper drop in prices last summer.
Donnell cautioned that house prices are lower now than they were a year ago in the South West, the South East and the East of England, where “affordability remains a constraint”. Further north, where home values are generally lower, prices are rising much more quickly. In Northern Ireland, house prices have, on average, increased by 5.7 per cent over the past 12 months, while in northwest England, prices have risen by 2.1 per cent.
Zoopla expects prices to continue rising, albeit at a “modest” pace owing to the growing number of houses on the market.