UK house prices: First-time buyers force growth surge as buy-to-let investment tails off
Buy-to-let purchases might be tailing off – but the number of first-time buyers in the UK property market has surged, pushing prices up as demand intensifies.
Figures out from estate agents Haart this morning showed that while average house prices climbed 4.1 per cent in the year to February 2016, the average first-time buyer house price jumped 9.8 per cent, reaching a six-month high of £176,281. Since January, prices rose 0.8 per cent, compared with the UK average decline of 5.3 per cent.
In London, the rate has risen even faster – up 19.3 per cent in the year to £544,430. However since January average property prices in the capital have actually declined 1.3 per cent.
Chief executive Paul Smith said: “First-time buyers flooded the market in February, with the number of registrations up a huge 22.7 per cent on last year and up 7.6 per cent since January, the highest monthly increase in nearly a year. However as demand from first-time buyers has increased, so have prices."
In February there were 14.9 new buyers for every property, Haart said – up 21.5 per cent on the 12 months earlier, although down 2.7 per cent on January. The total number of house sales going through fell 7.8 per cent year-on-year to 46,153.
Smith explained: "The buy-to-let market began to cool in February as most landlords sought to finalise their purchase before March, allowing time to complete before the April deadline for new rules on stamp duty.
"However despite the temporary lull in the buy-to-let market, there is no reprieve for first-time buyers, who are still facing intense competition for properties. A shortage of new homes coming on to the market is still making their property search difficult, and today’s data shows that competition for properties will only increase as we enter spring, which is one of the most popular times to buy a new home.”