House prices for first-time buyers soar after buy-to-let 'feast'
Property website says there "may be some over-pricing in the market"
Average prices for properties coming on to the market in England and Wales with two bedrooms or less rose by more than six per cent from March to April. The figure compares to an increase of just 0.4 per cent across the market as a whole, according to The Guardian. First-timers need to pay £194,224 to meet the asking price of the average smaller home.
Claims that these numbers are being propelled by an out of control housing market in central London are not true in this case, as the capital's inner regions are not included in the calculations.
Prices may still be inflated, Rightmove admits. "It remains to be seen if these prices can be achieved and there may be some over pricing in the market," its director Miles Shipside said. He added that there was a general sense of higher-quality properties coming on to market, which would also help to drive prices higher.
Shipside's central claim is that the huge leap in the listing price of smaller homes in April is due to the rush of landlords buying in the preceding few months, as investors sought to beat a new three per cent stamp duty surcharge that came into effect on 1 April.
"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," he explained, according to the International Business Times.
Things may not improve quickly for new buyers, either. Johnny Morris, research director at estate agents Countrywide and Paul Milson of the Leaders estate agency in Epsom, Surrey both told The Guardian that landlords were not being put off by the new stamp duty. Instead they were looking to buy smaller homes for which rental demand remains high.
Not all areas are seeing first-time buyer asking prices rise. Llandudno in north Wales has seen prices fall by 7.5 per cent over the past year.