It seems changes to stamp duty have not eased the property drought for first-time buyers in Britain.
Higher taxes for buy-to-let property investors and second-time landlords has slowed the increase in property prices overall – but contributed to a surge at the lower-end of the market, according to Rightmove.
The average asking price for first-time buyers recorded its highest monthly jump since February 2012, according to the property website’s monthly price index. Prices for this market increased by 6.2 per cent in the month to May 7 making the average cost of a first house £194,224 compared with £182,926 the month before.
Rightmove said that a rush to complete transactions before the new stamp duty rules came into effect on April 1 had leeched the market of lower-end stock.
Said director Miles Shipside:
If you were expecting a long period of price doldrums at the lower end of the market following the mass exit of the buy-to-let brigade, this month’s 6.2% price rise will come as a big surprise.
Properties at the lower end of the market were the most common target for the investor community, and the immediate aftermath of the tax deadline saw new seller asking prices drop in this sector for just one month.
Regional hotspots for first-time buyers include Croydon, Dartford and Luton, which all reported price increases of over 18 per cent year-on-year.
Overall average asking prices of new property coming to market in Britain have increased only modestly – by 0.4 per cent, compared with 1.3 per cent in March. A separate survey by Halifax showed that prices fell by 0.8 per cent in April, compared with a 2.2 per cent increase in March.
Market experts have attributed the slowdown to the new stamp duty rules, cooling economic growth and the upcoming referendum on European Union membership. The chancellor too has weighed in, arguing that house prices will take a “significant hit” if Britain votes to leave the EU.