First-Time Buyers Bouncing Back
House prices in the East of England have increased by 0.1 percent since October 2017. The rise may not be much, but at least it’s going in the right direction. Certainly, it’s faring better than property in the South East which has fallen by 0.1 percent. Meanwhile greater London continues its downward trajectory with a 1.1 percent drop in value on last year’s prices.
It brings the average cost of a property in Hertfordshire to £353.923 while in Middlesex it’s £406,290 and in Greater London £625.064.
Average Regional House Price Trends - Oct 2018
The lowest national autumn increase for six years
Overall house prices haven’t increased much throughout the UK, with an average rise of just 1 percent (or around £3,184). That’s the lowest rise at this time of year since 2012, in fact, and it brings the cost of the average house in the UK to £304,061.
There is one sector of the population who is benefitting from this – buyers; and particularly first-time buyers, due to the fact house prices aren’t escalating.
The latter is also benefitting from the fact there are fewer Buy to Let landlords on the scene – or at least fewer Buy to Let landlords and buying fewer one and two-bedroom properties. It seems then the government’s tax on second homes and cuts in landlord tax relief are finally coming to fruition.
And certainly, the statistics are bearing this out. The number of Buy to Let mortgages which have been approved has fallen by 14 percent this year. That’s quite a lot considering they had already declined by 53 percent three years ago.
First-time buyers come to the fore
First-time buyers are filling that gap in the market. They are not only benefit from relief from Stamp Duty on properties less than £300,000, but the government is also helping with their deposit via schemes such as Help to Buy.
Again, the statistics bear out, with the number of first-time buyer mortgage approvals up by 1 percent compared to the same time last year.
One West London estate agent agreed. Robert Lazarus, MD of Sales at Paramount Properties in North West London said that, prior to the government’s decision to put Stamp Duty on second homes, his company sold one-fifth of all one-bedroom properties to landlords.
Today landlords take up less than 5 percent of the total. It means first-time buyers not only have more choice, but they’re also getting the pick of the best properties.
Miles Shipside, Rightmove director and housing market analyst, said current market conditions were the ideal opportunity for first-time buyers to get their foot on the property ladder. This is especially the case when you consider that at this time of year there is usually a rise in the price of property coming to market following the summer slump.
He added: “Whilst all regions have seen a monthly rise, this year has a more subdued narrative with only a one percent uplift as the script has more sub-plots to affect the mood.
“While the backdrop of political uncertainty and stretched buyer affordability remains the same, this month has price drops at the bottom of the market dragging down the national average.”
Shipman added that schemes such as Help to Buy, which are restricted to new build properties, meant more brand-new homes were being sold.
This meant it was even more important that sellers of more traditional properties priced their property extremely carefully – or were prepared to negotiate considerably with a first-time buyer who now held all the cards, as it were.
Possible sweetener to landlords to pack up
Meanwhile, rumours abound in property circles that the government’s next budget (on October 29, rather than November to avoid any Brexit decision clashes) may be about to persuade more Buy to Let landlords to leave the property market and invest their cash elsewhere.
That’s because it’s believed the Chancellor may just encourage landlords to sell their properties to sitting tenants, by abolishing capital gains tax in such an event.
Other statistics issued by Rightmove in their monthly house price index showed that the average time it takes to sell a house in the UK is currently 61 days – three days longer than the same period last year.
The number of houses (or apartments) the typical estate agent has to sell is 52. This is the same number as last month and 4 more than in September 2017.
Property categories and their prices
The cost of the average first-time buyer property in the UK (London excluded) is around £190,842.
Second stepper homes are valued at £273.297 and top of the market properties at £536,983.
The biggest rise, compared to the same time last year, was an increase of 1.7 percent in three-bedroom homes (second stepper), first-time buyer properties increased by 1.5 percent and top of the market by 1.1 percent.
London prices still on way down
Only one Transport for London (TfL) zone saw house prices increase in September compared to the same period last year.
In zone 6 they went up 1.5 percent, making the average property in the area worth around £498,865
In zone 1 the price of the average property stayed the same but in zones 2 to 5 inclusive it fell – and by as much as 2.1 percent in zone 3.
It’s also taking around 72 days to sell a property in the capital (almost a week and a half longer than in the rest of the UK).
London’s winners and losers
Most significant gains were in Richmond upon Thames were prices were 2.7 percent up on the same period last year. Next equal was Bexley and Barking & Dagenham – both of whom experienced a 2.4 percent rise in house prices.
Again, property owners in Hackney were worst off in terms of valuations, with a 5.5 percent drop compared to 2017’s prices. Next equal were Lewisham and Lambeth, both of whom experienced falls in their property’s value of 4.7 percent.
Image credits: Google
Source: Rightmove House Price Index – Oct 2018 – data used to compile the Aug 2018 report was based on properties sold via the portal from Sept 9th to Oct 6th this year. This represented a total of 114,049 asking prices (rather than the eventual cost of the house or apartment once sold – and which differs from other figures such as the Land Registry which records the sale price of each property sold).
Rightmove prides itself on having signed up more than 90 percent of the UK’s estate agencies and house sellers, resulting in an ongoing stock of more than one million properties in the UK available to either purchase or rent.