Rightmove reports that sales of smaller homes, often listed as landlords leaving the market, are facing difficulties.

While the overall housing market has seen a positive start to 2025, smaller homes, typically sold by landlords and sought-after by first-time buyers, have not shared in this success.

Since Boxing Day, enquiries in this segment have increased by only 8%, the smallest rise across all market sectors and the portal attributes this sluggish performance to upcoming stamp duty changes set for April.

The portal announced on Monday 20th Jan: “Stamp duty charges rising for those buying above £300,000 will be a drag on the important bottom-of-the-ladder market in more expensive areas, unless some additional help for first-time buyers is announced soon.”

The portal warns that mortgage rates continue to be unexpectedly high impacting buyer affordability. According to its weekly mortgage tracker, the average five-year fixed mortgage rate currently stands at 4.75%, a marginal decrease from last year's 4.78%. Similarly, the average two-year fixed mortgage rate has dropped slightly, from 5.08% last year to 4.97% now.

Fluctuating projections on the number of Bank Rate cuts anticipated this year are creating uncertainty, dampening the enthusiasm of potential buyers for the new year.

A spokesperson for the portal, says “Many buyers are still affordability-stretched, with high mortgage rates restricting borrowing power and limiting what they can afford to pay. Meanwhile, first-time buyers have seen support schemes reduce and some also face higher stamp duty fees from April, all while contending with record rents and trying to save up for a deposit.”

“Rightmove’s early-year snapshot shows a promising start to 2025. However, the market needs a boost for that momentum to be sustained in the form of early and ongoing Bank Rate cuts, which should hopefully help to reduce mortgage rates. Some further support for first-time buyers would also be welcomed, particularly in more expensive areas of the country.”

A mortgage expert at the portal, adds: “The message around how many Bank Rate cuts we should expect this year keeps changing, creating some uncertainty for movers. News of high government borrowing costs was swiftly followed by better-than-expected inflation figures, highlighting how quickly the mood can change.