Sellers playing it cautious on price amid worries over Brexit combined with a buy-to-let tax crackdown have made it a first-time buyers’ market, according to property listing site Rightmove.
It said first-time buyers – and those climbing the property ladder – have a window of opportunity to negotiate a favourable deal on a home, as asking prices have seen a smaller ‘autumn bounce’ than usual.
While newly-listed homes asking prices rose by 1 per cent in the month to mid-October, this is lower than the expected from the traditional back-to-school uplift – and typical first-time buyer two-bedroom properties saw a 0.1 per cent monthly decline.
Asking prices: They have risen 1% in the last month – the smallest jump at this time of year since 2010, according to Rightmove
Across Britain, the average price tag on fresh property coming to market increased 1 per cent – or £3,184 – over the past month to £307,245, the smallest rise for this time of year since 2010.
Its figures reveal where in the country asking prices of newly-listed homes are rising fastest, ranging from London’s 1.1 per cent annual fall to a 5.5% rise in the West Midlands.
Prices usually see a bigger autumn bounce at this time of year – typically increasing by 1.6 per cent, according to property website, which looks at asking prices opposed to sold prices.
The less than two-bedroom category is the usual target market for both affordability-stretched first-time buyers and buy-to-let investors.
It said that less buy-to-let investor activity is giving first-time buyers an opportunity this autumn.
Miles Shipside, director of Rightmove, said aspiring first-time buyers have ‘an autumn opportunity to negotiate a favourable deal.’
He added: ‘The story at this time of year for the last five years has been an average autumn bounce of 1.6 per cent in the price of property coming to market.
‘While all regions have seen a monthly rise, this year has a more subdued narrative with only a one per cent uplift.’
Annual change: The average asking price in Greater London is down 1.1% in a year, while the West Midlands has seen the biggest growth
Why is it a first-time buyers’ market?
The biggest hurdles for aspiring home buyers are raising a deposit and getting a mortgage that covers the amount they need to borrow.
If they can clear these, then they can benefit from record low mortgage rates and softer pricing providing the opportunity to negotiate hard.
Rightmove’s Miles Shipside said: ‘Landlords are clearly buying far fewer properties and that leaves a gap in the market for first-time buyers.
‘While landlords were hit with a 3 per cent stamp duty surcharge on property purchases back in April 2016, in contrast most first-time buyers were effectively awarded stamp-duty-free status in November 2017.
‘The fall in prices at the bottom of the market during what is a traditional busier time means that those keen to sell need to price accordingly, which gives an opportunity for those stamp-duty-free first-time buyers to negotiate harder.
‘First-time buyer mortgage approvals are up, albeit by a marginal 1% year-on year, showing that some first-time buyers are helping to fill the gap in the market left by less competition from investors. More activity may follow if prices remain subdued, with stamp duty relief and falling prices helping their affordability.
‘If the Chancellor’s budget later this month encourages more landlords to sell to long-term tenants for rumoured capital gains tax relief, then landlords who are looking to sell and renters who aspire to become first -time buyers could work together for their mutual benefit.’
Average time: It takes an average of 61 days to sell a property – up from 58 days a year earlier
Mr Shipside said tax changes for buy-to-let investors have helped to tilt the balance of housing market activity back towards first-time buyers.
Properties with two bedrooms or fewer are now taking longer to shift typically than a year ago – up from 55 days to 58 days.
This compares to 61 days for all types of property, which is also up three days compares to same time last year.
The average asking price on a typical first-time buyer property is now £190,587.
Mr Shipside said: ‘Landlords are clearly buying far fewer properties and that leaves a gap in the market for first-time buyers.
‘While landlords were hit with a three per cent stamp duty surcharge on property purchases back in April 2016, in contrast most first-time buyers were effectively awarded stamp duty-free status in November 2017.’
He said those stamp duty-free first-time buyers now have an opportunity to negotiate harder.
Strong growth: How the typical first-time buyer asking price has risen in recent years
Four cities see six-figure growth in just a decade
Homeowners in four of the UK’s biggest cities have seen their property values increase by six-figure sums on average in the decade since the financial crisis struck, analysis has found.
But a fifth of homes across the whole of the UK are still valued at less than they were 10 years earlier, showing the impact still felt on the market, according to property analysts Hometrack.
Hometrack, which looked at the UK’s 20 biggest cities, found that in Bristol, Cambridge, Oxford and London, average house prices increased by £100,000-plus between August 2008 and August 2018.
In London, average property values are approaching £200,000 higher than 10 years ago.
The average house price across the 20 major cities is now just over £75,000 higher than it was 10 years ago, standing at £254,347 in August.
But not everywhere has seen an increase. In Belfast, house prices are more than £44,000 lower on average than they were in August 2008, Hometrack’s analysis for the Press Association found.