First-time buyers have been left with a property famine in the aftermath of the buy-to-let feast ahead of the Stamp Duty deadline, Rightmove has claimed.
Chancellor George Osborne may have boasted that his crackdown on buy-to-let would open up the property market to first-time buyers.
But the property portal’s House Price Index for May found the rush to beat the Stamp Duty deadline for landlords in March, has actually left fewer properties coming to market, especially in the lower end sector.
Typical first-time buyer homes, properties of two-bedrooms or fewer, have surged 6.2% in the past four weeks to £194,224, the highest monthly rise recorded for the investor/first-time buyer sector since February 2012.
The average asking price overall has gone up 0.4% since April and 7.8% year-on-year to £308,151.
The biggest increase in the price of property coming to market compared to a year ago in the typical first-time buyer sector was in Croydon, Greater London, up 18.6% to £297,770.
Outside the capital, Dartford experienced an 18.5% jump to £244,310, while Luton was up £186,900.
There have been some price drops, the largest at 7.5% to £145,703 in Llandudno and 3% to £92,639 in Darlington.
Miles Shipside, Rightmove director and housing market analyst, said: ““Buy-to-let investors have had a bricks and mortar feast between the Chancellor’s announcement in November and the tax deadline at the end of March, and the result is a famine of suitable property and higher prices. First-time buyers are still eager to secure some of the very limited suitable supply in many parts of the country.
“Estate agents have perhaps been focused on getting investor sales through to completion before the tax hike, and some may have been surprised by the continuing momentum and scarcity of stock to meet ongoing demand.
“The net effect is eye-watering increases in asking prices in some towns, and is further stretching first-time buyers’ affordability even though they are competing against fewer buy-to-let investors in the market.”
Perhaps FTBS are being fussy. Just done a search on Rightmove and it returned 675 entries for non retirement properties up to 150k. Lots of flats! So why aren’t FTBS snapping them up? It’s only an hour to King’s Cross by fast train.
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Agree and disagree, JMK. There is an element of “beggars can’t be choosers” with FTBs who desperately want to buy. But the underlying issue is that they shouldn’t be beggars! Owning a property isn’t a right but there should be a more stable supply/demand balance.
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The large increase in Croydon reflects the massive surge in new build.
Interestingly, a number of overseas investors previously buying £2 million apartments in Central London changed strategy following the last but one stamp duty change. They went on to buy say 5 x £400k apartments in the likes of Croydon. Rather than pay £153,750 stamp on a £2 million home they still spent £2 million but paid only £50,000 in stamp over the 5 properties. Saving over £100,000.
These investors are now firmly swimming in the FTB pool whereas previously they had almost no impact on FTB’s.
Just another example of government and its law of unintended consequences.
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