New Year home sellers have raised asking prices by £1,000 but home buyers this year should benefit from a decline in buy-to-let investors, according to Rightmove.
The property listing website said that monthly asking prices for newly listed homes were up 0.4 per cent in January to £300,425 – and up 3.2 per cent annually.
But it said that those looking to buy a home in the first half of 2017 would face a far less competitive market than this time last year, when the rush to beat the buy-to-let stamp duty hike was in full swing.
Strong asking price rises continue to be recorded in some areas, with newly-listed homes up 6.1 per cent in the East of England and 5.5 per cent in the South East, said Rightmove.
But it highlighted that overall conditions should be better for those looking to move home or buy their first property, with less competition in the market.
It said that gave first-time-buyers more choice and negotiating power to battle rising prices.
The decrease in landlord demand has come after a tax hike from 1 April 2016 saw a 3 per cent surcharge added to stamp duty for buy-to-let and additional homes. Before that deadline arrive there was a surge in buy-to-let purchases between January and March last year.
The monthly rise of 0.4 per cent in asking prices was in line with the 0.5 per cent seen last January, but there should be less people competing for those homes
Rightmove said the number of sales agreed in the typical first-time-buyer sector of two bedrooms and fewer was down 13.2 per cent in December compared to the same month in 2015.
As a result, available stock for sale in this sector is said to be up 1.9 per cent up from last year, offering more choice for first-time purchasers.
This contrasts with the same period a year ago, when available stock fell by 18 per cent as active buy-to-let purchasers reduced choice and limited buyers’ ability to negotiate.
Commenting on the trend, Miles Shipside, Rightmove director and housing market analyst said: ‘Those planning to buy their first home in 2017 have more choice of properties and less competition from other buyers than their counterparts a year ago.
‘It’s a possible learning point for aspiring first-time buyers that a year ago buy-to-let purchasers acted more quickly and closed deals at a faster rate, appearing not to take a Christmas break.
‘Admittedly they had the financial incentive of a deadline to motivate them, but first-time buyers still have time to act.’
The restraining force that remains on potential first-time buyer activity, is increasingly stretched affordability.
It is not all good news for first-time buyers, however. Their favoured target sector of two bedrooms or fewer homes has seen the biggest price rises both month-on-month (+2.6 per cent) and year-on-year (+6.4 per cent).
However, as these are asking prices, their is no guarantee that this will filter through into the actual value achieved when the homes are sold.
‘Some sellers of first-time-buyer properties may be being over-optimistic with their pricing, giving an opportunity for budget-strapped first-time buyers to negotiate, especially if they act now while there’s still more choice available,’ said Mr Shipside.
Mark Manning, director of Manning Stainton in Leeds, Harrogate, Wetherby and Wakefield said that he has also noticed an increase of stock on the market, which could help home buyers.
He added: ‘As we got off the train onto the 2017 platform it was difficult to know who might be there to greet us.
‘Were we to expect a lonely welcome and a continuation of the subdued market we saw at the end of the year or a swathe of new sellers ready to greet us.
‘Fortunately, the answer appears for now to have been the latter.
‘New seller enquiries are 26 per cent up on the same time last year giving the strongest indication that we may see a slight ease in the lack of supply in the market.
‘Now this will be welcome news amongst first-time buyers who have registered in strong numbers and are waiting for much needed new stock to come to market.
‘Combine this with a comparative reduction in new investors and landlords of 32 per cent over the last quarter compared to the same quarter a year ago and this may well be the year of the first-time buyer.’
The average age of a first-time buyer is 30, ranging from 27 in Carlisle in Cumbria and Torfaen in South Wales to 34 in places such as Slough in Berkshire and the London boroughs of Barnet and Ealing.
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