First-time buyers facing less competition for starter homes
Sales agreed for two-bedroom or smaller properties fell by 13% in December compared to the same month in 2015, when the stampede of buy-to-let investors flocked to the market to snap up properties ahead of the Stamp Duty levy on second home purchases.
During this time stocks of homes in this category fell by 18% as landlords moved quicker than first-time buyers to snap up properties over the festive period.
Without this added pressure on the availability of first homes, stock for sale in this category rose 1.9% in December, year-on-year.
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 and currently have the incentive of stronger negotiating power to try and mitigate the upwards trajectory of property prices.”
It is not all plain sailing in 2017, however, for first-time buyers as affordability constraints continue to hold them back. The two-bedroom or less category has seen the biggest price rises both month-on-month, with an increase of 2.6%, and year-on-year with a rise of 6.4%. These are the largest price rises of any house type category sector, partly a legacy from last spring’s buy-to-let surge.
Shipside added: “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.”