Source: The Guardian
The average asking price of homes coming on to the market has risen to a new high, increasing by 1.3% over the past month to an average of £307,033 as landlords raced to buy properties ahead of an increase in stamp duty.
According to the property website Rightmove, the change to stamp duty on 1 April helped “ignite an onward chain reaction”, with landlords snapping up homes at the bottom of the ladder and former owners moving on.
The average asking price for properties typically bought by first-time buyers was down by 1.4% over the month to £182,926, when inner London was excluded, but there were rises in the price tags of larger homes.
The asking price for three- and four-bedroom properties newly listed in April was up by 0.6% on the previous month, at £257,871, while at the top of the ladder homes with at least five bedrooms and four-bed detached properties, were being marketed for 1.9% more than in March, at an average of £546,232.
Rightmove’s figures, which are based on homes listed on the site during the past four weeks, show that sellers in all parts of England and Wales are asking more for their homes than those marketing their properties in April 2015.
The largest annual increase was recorded in the east of England, where the average asking price is up by 10.8% at £331,780, closely followed by the south-east and then London. In the capital, the average new asking price has risen by £51,615 over the past year, to £646,200. The cheapest region is the north-east, where the average asking price is up by 3.5% year-on-year at £151,459.
A clutch of reports have shown that 2016 got off to a busy start in the housing market as investors tried to complete deals ahead of the introduction of the three percentage point surcharge on stamp duty on second homes from 1 April.
This change means buying a £182,926 property will cost an investor almost £5,500 more than a first-time buyer.
Rightmove said the lower rungs of the property ladder, properties with two bedrooms or fewer, had in recent years seen high demand from both first-time buyers and buy-to-let investors, creating upwards price pressure.
Even though demand had dissipated, it said, the momentum it created appears to have enabled owner-occupiers to trade up, creating demand for more expensive homes.
Rightmove director Miles Shipside said: “There’s a whole army of aspiring first-time buyers keen to get on the ladder and they now have a 3% price advantage over the formerly more agile legion of landlords, some of whom have retreated for the time being.
“First-time buyers could fill some of the gap but sellers of properties with two bedrooms or fewer need to realise that with less overall demand they need to price cheaper to match first-time buyers and highly taxed investors.”
First-time buyers struggling to raise a deposit could reduce the amount of time it takes by at least half by moving back in with their parents, property firm Hamptons International has calculated.
A couple saving for a 15% deposit across England and Wales would be able to save enough in 21 months if they lived rent-free with family, compared with three-and-a-half years if they faced rent and housing costs, the firm said.
In London, living rent-free would enable them to accumulate a deposit in 2.75 years, compared with seven-and-a-half years in their own home. A single buyer in London could reduce their saving time by 33 years, it claimed, to seven-and-a-half.