Hope to first time home buyers.
UK – There is further evidence that the crackdown on buy-to-let investors has had the desired effect, thus giving hope to first-time buyers, has come from two surveys.
Rightmove, the UK’s biggest property website, said a less active buy-to-let market had led properties with two bedrooms or fewer to drop 0.1% in price last month. Subdued prices provide first-time buyers with an opportunity this autumn.
First-time buyers are now paying an average of £190,000 for their home, compared with £307,000 across the whole market, it said.
Meanwhile, the upmarket estate agents Hampton International produced figures showing that money spent on buy-to-let purchases across the UK is currently 30% below what it was in 2015.
The 3% stamp duty surcharge faced by purchasers of second homes, and changes to the way buy-to-let income is taxed, appear to have reduced the appeal of the sector, which expanded rapidly after 2008.
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At the height of the buy-to-let boom, those first-time buyers who were able to get a 10% deposit together frequently found themselves outbid by buy-to-let landlords.
In London, landlords spent £3.5bn in the first half of this year buying rental homes, said Hamptons, 40% down on the same period of 2015.
Rightmove said mortgage approvals for new buy-to-let purchases are 14% down on a year ago and 53% down on three years ago as a more punitive tax regime has had “its desired effect”.
While asking prices traditionally rise in October, it said this year’s 1% increase in average asking prices across the country is the lowest since 2010. Rightmove’s Miles Shipside said: Landlords are clearly buying far fewer properties and that leaves a gap in the market for first-time buyers. They were effectively awarded stamp duty-free status in November 2017, Shipside said, adding that the fall in prices gives an opportunity for those stamp duty-free first-time buyers to negotiate harder.
Markets in London and the north-east are currently the most sluggish, according to Rightmove. Properties in both areas are taking in excess of 70 days to sell.
Scotland remains the perkiest market, with properties shifting after an average of 44 days. Last week, the Royal Institution of Chartered Surveyors said Brexit uncertainty had crushed confidence in the property market.
Overall prices are 1% down in the capital compared with a year ago, but still stand at £625,000 or £1.35m in central London. The north-east remains the UK’s cheapest region with an average asking price of £150,000, said Rightmove.
Aneisha Beveridge, head of research at Hamptons International, said the average price of a property bought as a buy-to-let had fallen by 7% since 2016.
Author – Miles Brignall
Source – The Guardian
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