A modest May increase of 0.4 per cent (+£1,118) in the price of property coming to market masked a nasty spring surprise for first-time buyers, according to Rightmove.
An 80 per cent uplift in March transaction numbers reduced the number of properties available and sent prices up 6.2 per cent (+£11,298) for typical first-time buyer properties.
Miles Shipside, Rightmove’s director and housing market analyst, stated: “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 per cent 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 sellers asking prices’ drop in this sector for just one month.”
The 1.4 per cent fall reported in April’s index appears to have been “a very short-lived knee-jerk”, he continued, with the average property price reaching a new record of £308,151.
“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,” stated Mr Shipside, adding that first-time buyers are still eager to secure some of the very limited suitable supply in many parts of the country.
The biggest increase in the price of property coming to market compared to a year ago in the typical first-time buyer sector is in Croydon in greater London, up by 18.6 per cent.
In regions outside London, but still in commuter-belt territory, Dartford in the south east has recorded an 18.5 per cent jump, with Luton in the east of England up by 18.4 per cent.
Righmove noted that its agents report that all of these areas were the focus of considerable buy-to-let investor activity. Conversely, six out of 10 regions contained some towns which have seen falls in average asking prices, with the largest drops in Llandudno at 7.5 per cent and Darlington down 3 per cent.
Jeremy Duncombe, director of the Legal & General Mortgage Club, said that while some may view these figures as good news, it’s important to remember that these rises mean that the prospect of homeownership is becoming more and more distant for most aspiring homeowners.
“We’ve had promise after promise and policy after policy when it comes to tackling the housing crisis, but the simple fact is that these words have not been met by action on the ground.”
He added that if the government and developers continue to procrastinate, “this will only exacerbate the current problems that plague our housing market and threaten to price a generation out of homeownership altogether”.