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House prices have risen by 1.3% in the last few months, in response to a surge in activity as landlords rushed to buy properties ahead of the rise in stamp duty. This sudden flurry of activity has sparked a chain reaction says leading property website Rightmove, with landlords buying cheaper homes at the bottom of the market and homeowners moving onwards and upwards.
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The average cost of a three and four bed home has risen by 0.6% whereas more expensive detached properties have gone up by 1.9%. The largest increase is in the east of England, where prices have risen by 10.8%
Landlords Competing with First Time Buyers
Landlords are competing with first time buyers for one and two bed properties at the cheaper end of the market.
“There’s a whole army of aspiring first-time buyers keen to get on the ladder and they now have a 3% price advantage over the formerly more agile legion of landlords, some of whom have retreated for the time being,” says Miles Shipside from Rightmove.
Less Demand for Cheaper Properties
“First-time buyers could fill some of the gap but sellers of properties with two bedrooms or fewer need to realise that with less overall demand they need to price cheaper to match first-time buyers and highly taxed investors.”
Due to government tax changes, landlords and property investors will now have to pay around £5k more than a first time buyer. Demand for cheaper properties appears to have settled down, but the momentum it’s created has fuelled demand higher up the property ladder.
