UK house prices rose 1% in September to an average of ￡267,500 as rising incomes and the lowest mortgage rates for two years are supporting the highest level of new sales agreed since autumn 2020.

Property site Zoopla said the UK housing market is set for a landmark year in 2024, with the total value of homes in the sales pipeline surging by 30% to ￡113bn.

House price growth has risen by 1% annually, up from a 0.9% contraction recorded a year ago.

Stamp duty appears to be the biggest concern ahead of the budget, as Rightmove warned that if the current stamp duty thresholds are not made permanent during the budget, the average first-time buyer (FTB) will pay ￡3,538 in stamp duty compared with nothing now.

The implications of this shift are far-reaching. Currently, 28% of all home-movers benefit from stamp duty exemptions. However, if the thresholds are lowered from ￡250,000 to ￡125,000, this percentage will plummet to just 5%.

First-time buyers will not be spared either. Presently, 61% are exempt from stamp duty, but this figure is set to drop to 40% if the threshold is reduced from ￡425,000 to ￡300,000.

Tim Bannister, Rightmove’s property expert said: "The rumours that 'nil rate' and first-time buyer stamp duty thresholds will indeed be reverting to previous levels as of March 2025, rather than be held at their current rates, will no doubt be seen as an unwelcome additional cost by many buyers looking to make their move in 2025 – and potentially to those currently in the process.

“With the threshold for the nil rate, the rate at which no stamp duty is charged for home-movers, due to fall from ￡250,000 to ￡125,000, anyone purchasing a property over this amount could face paying up to ￡2,500 more in stamp duty land tax.

"Meanwhile, the threshold rate at which first-time buyers do not pay stamp duty is likely to fall from ￡425,000 to ￡300,000. If a first-time buyer buys a property at the average UK price of ￡370,759 they will pay ￡3,538 in stamp duty from March 2025, compared with nothing now.”

While price inflation remains subdued due to a high supply of available homes and affordability constraints, the sales pipeline has reached its largest volume in four years. The 306,000 homes currently progressing toward completion represent a 30% increase in value compared to last year.

House prices are advancing at above-average rates in affordable regions, including the North East (2%), Yorkshire and Humberside (2%) and Scotland (2.4%). Northern Ireland leads with a notable 5.6% increase. At the other end of the spectrum, prices in the South East and East of England have dipped slightly, showcasing yet again regional contrasts in affordability and demand.