20 Apr UK asking prices reach new high of £307,033
Article in PropertyWire 20 April 2016 (reproduced with permission of PropertyWire)
Average UK asking prices increased by 1.3% or £3,843 in April compared to the previous month and are up 7.3% year on year, according to the latest index figures.
This takes the price of an average home to a record high of £307,033 with market activity having been pushed up due to a rush by buy to let investors to beat the April stamp duty change, says the index report from Rightmove.
Indeed, the stamp duty deadline gave an early impetus to the bottom of the market and this had the knock-on effect of energising the higher sectors of the market as growth was driven by second-stepper and top of the ladder sectors.
The report also says that smaller properties in the first time buyer and buy to let sector actually saw a month on month price drop of 1.4%. But overall while buy to let demand will not have gone it remains high overall with record visits on Rightmove in March.
‘The further demand boost from those looking to complete before 01 April has now dissipated, resulting in a 1.4% drop this month in the average price of a property coming to market in the first time buyer and investor sector,’ said Miles Shipside, Rightmove director and housing market analyst.
‘However, the momentum it created looks to have enabled owner occupiers of these properties to trade up. This has built an onward chain reaction of higher demand in higher price brackets as more people can move,’ he explained.
He also pointed out that upwards price pressure has moved into the typical second stepper sector of three or four bedrooms excluding four bedroom detached properties. Prices are up by 0.6% or £1,512 this month, and this sector compared to the others has seen the largest year on year rise of 8.6% or £20,519.
Meanwhile top of the ladder sector of four bedroom detached and five bedrooms or more has seen the biggest rise this month, up by 1.9% or £9,970. Their annual rate of increase remains the lowest however, at 5.1%.
‘While some felt that there would be a stampede of existing landlords selling to other landlords, these figures indicate that many of those who sold during the buy to let rush were actually first time sellers looking to trade up,’ said Shipside.
‘They used the heightened demand from investors competing fiercely with first time buyers to springboard themselves onto the next rung of the housing ladder. After several years of being held back from moving by post credit crunch price doldrums, they have now benefitted from a heady combination of price growth, historically cheap interest rates, and confidence of a quick sale with purchasers working to a tight deadline,’ he pointed out.
‘Trader uppers have now been unleashed and this has spread demand upwards and helped to form longer chains. Interestingly there has been a stamp duty double whammy effect pushing up prices in these higher sectors too. Earlier reforms in December 2014 reduced stamp duty for all properties priced below £937,000, especially around the previous punitive thresholds, also boosting demand and prices,’ he added.
While demand from some buy to let landlords has dropped away, Rightmove recorded its busiest ever month for visits to the website in March. ‘It is likely that appetite from investors will return for the right property at the right price and yield, but in the meantime it gives first time buyers an opportunity to fill the void with less competition from typically faster moving cash rich landlords,’ Shipside explained.