An exodus of buy-to-let landlords in London is opening up a unique opportunity for first-time buyers, property website Rightmove has suggested.
House price movements in the capital are at their most subdued in eight years, with prices for one and two bedroom properties falling marginally over the past year.
This is the point where aspiring first-time buyers typically have competed with investors, but a 3% rise in stamp duty for buy-to-let and second home properties has put off many would-be landlords, clearing the way for new buyers, The Times reports.
Miles Shipside, a Rightmove housing market analyst, said: “Government policy has sought to reduce [buy-to-let investor] activity and so tilt the balance back towards first-time buyers.”
He added that “landlords are clearly buying far fewer properties and that leaves a gap in the market for first-time buyers”.
While landlords were hit with the 3% stamp duty surcharge from April 2016, first-time buyers were “effectively awarded stamp-duty-free status in November 2017”, said Shipside.
The fall in prices at the bottom of the market over the same period provides an opportunity for aspiring homeowners to “negotiate harder”, says Shipside.
The muted buy-to-let sector “is also dampening demand and stifling the usual autumnal hike in asking prices”, says Homes and Property.
The Rightmove Index has found the autumn selling season, which sees vendors launch properties that have been held back over the summer, has started with a whimper as asking prices in central London fell 1.1% to £625,000 this October compared to the same month last year.
Property analysts believe this slowdown is due to deepening political uncertainty in the build-up to the UK leaving the European Union next March and the gap between house prices and household incomes in the capital, with first-time buyers still struggling to save for a deposit.
North London estate agent and former Rics residential chairman Jeremy Leaf told Mortgage Strategy: “Buyers and sellers seem worried about the two ‘B’s – not only about the impact of a good, bad or indifferent Brexit deal but also the looming Budget at the end of the month.”
All eyes now turn to Philip Hammond, with the chancellor rumoured to be looking to encourage more landlords to sell to long-term tenants for a capital gains tax relief.
This could provide a win-win situation for both investors and first-time buyers, and further boost the number of one and two bedroom properties on the market.
Source: The Week