First-time buyers pay the price as they go head to head with investors

Asking prices of homes coming on to the market have hit a new record, Rightmove said this morning.

The average new asking price is now £296,549 – up 0.6% in a month and 5.6% up on a year ago.

Rightmove said the new record has been fuelled by high demand for smaller properties – those with up to two bedrooms – as first-time buyers and buy-to-let investors go head to head.

It said that asking prices for these smaller homes are up 4.9% on a month ago and 9.6% on last year.

Supply of smaller homes has dropped by 8% compared with last year.

Nationally, excluding inner London, a typical smaller home now has an asking price of £184,676.

A typical second-stepper property new to the market has an asking price of £247,004 – illustrating the financial hurdle that second-time buyers need to clear.

The average asking price of a top-of-the-ladder home is £530,457.

Despite new asking price records being set, the actual rate of increase has slowed with the 9.6% monthly rise being the lowest October increase since 2010.

The portal said that a “vicious circle” has been created, with high tenant demand pushing buy-to-let landlords to invest.

According to Rightmove, many letting agents are reporting same day rentals, with little or no property available to let.

Rightmove described rental demand as “extraordinary”, citing lack of supply by housing associations and local authorities.

Rightmove director Miles Shipside said: “Tenant demand is such that many letting agents are reporting viewings and tenancy applications on the same day as marketing properties.

“In some cases they’ve nothing left to rent until tenants move out or a new influx of investor landlords gives some short-lived respite to tenants-in-waiting.

“Both investor landlords and first-time buyers looking to buy smaller homes are finding them in short supply. As they’re typically owned by potential first-time sellers, the price gap and costs of moving to the second step on the housing ladder deter them from coming to market.

“Competition is most fierce in this sector, with first-time buyers and buy-to-let investors going head-to-head for the same properties.”

Danielle Cosway, business manager from Clear Property in Exeter, said: “Over the past three months demand for rental property has increased massively. We just can’t get enough lettings stock to satisfy the demand and we’re struggling to keep properties on the market for more than 24 hours.”

Today’s Rightmove report follows that by Your Move and Reeds Rains, which says rents across the UK have hit an all-time high.

The average rent in London is now £1,301 a month, up 11.6% from a year ago.

Nationally, the average rent is up 6.3% on last year, to stand at £816 a month.


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  1. Robert May

    This was  discussed at length with the HPC ‘Canutes’ on EAT and LAT 3 or 4 years ago.  House blocking  and an over extended market means that transaction volumes will fall and with artificial levels of competition some  honest and decent agents will face a torrid time for fee income.

    It is when agents are sat there wondering how to pay staff and bills  necessary to provide a professional  agency service that portal charges really start to stick in the throat.


    1. The Outsider

      Now now Robert. How on earth does this story end with high portal charges?  Im all for bashing certain parts of the industry in context, but that link is very tenuous!

      1. Robert May

        Estate Agents get paid on completion, Miles Shipside is recognising that because of  House blocking and an over extended market the number of completions will fall, even though prices in some parts of the country might  be on the up the number of  completion fees will be down. Even though  Agent incomes will be reduced portal fees will not.

        There is nothing at all tenuous about that link, it is the economic reality  for those paying wages and bills. The natural assumption is that because some  markets are booming and prices rising so are agency commissions, that is not the case.  Individual commissions might be higher but  transaction volumes are reduced.

        I am not bashing anyone, I am telling the tale from the perspective of those who are wondering why they are contributing about £7600 annually   towards  a portal’s excessive profits per branch when their own business is, if they are lucky, breaking even.

  2. The Outsider

    It is bashing. You’ve singled out one of the many variable costs a high street agent has.

    In this instance the answer is simple, if there isnt enough volume to support paying a portal, remove yourself from it.  As so many say on here, it’s agents who sell properties, not portals, so in this market it shouldn’t have too much of a negative impact.


    1. PeeBee

      But… but… but if we all did that, then Rightmove wouldn’t be able to quote these ridiculous stats at people – would they?

      And you would have nothing to pick an argument over.

      1. The Outsider

        [enter Barry Chuckle from stage right]

        1. Robert May

          Errr if you have read any of Trevor Mealham’s recent posts you would know  the Pee in Peebee stands for Paul not Barry, he is Paul Chuckle not Barry.

    2. Robert May

      If I had randomly, out of the blue, posted that paying £800 for  a service that can be provided  for £163 at normal profits, that might have been a bash but  Rightmove have put out a story 3 or 4 years later than this was a trending discussion almost as if this is something unexpected. I am  simply posting my thoughts about the story and how it impacts agents going into the quiet months of  Winter and early spring.

      I agree agents should give very serious consideration to their marketing spend and should analyse where their sales are coming from and if  the portals aren’t generating  enough return to  warrant  two sales  average per month just to cover excessive profit charges really ought to  wonder who they  are actually working for.



  3. greg

    If stock is tight buyers and tenants will search it out. Do you really need to be on two highly priced portals?

  4. smile please

    If you share this status and I sell the house (from your share) I will pay you £1000! 

    one of the oldest property’s in the area with so much character throughout

    It’s Stunning

    Brand new extension, bathroom, kitchen, Central heating & Double glazed!
    £60,000 renovation done! 

    With 10% deposit, expect mortgage payments to be around the £875 mark!

    Okay so PMA, ASA and the FCA Anything else he has flown in the face of?

    1. smile please

      Sorry wrong Story!

    2. Robert May

      He doesn’t have to worry about regulation Smile he isn’t even a passive intermediary.

      If you have dug that far what is the address of the property? I reckon we could play  the valuation game.

      Let’s start with what the random number generators reckon it’s worth


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