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Tuesday, April 19, 2016

Rightmove sees average asking price rise to £307,033

Rightmove's HPI for April 2016 continues to see an up-swing in asking prices across the UK.

The average asking price on the site is up by £3,843 to yet another high of £307,033, a monthly rise of 1.3%.

The rush of BTL'ers trying to beat the Chancellor’s April 1st second home stamp duty deadline is blamed for creating upward pressure from the lower end of the market (2 bed properties), that has then fed through to the 'second steppers' that has then helped fuelled interest up all steps of the property ladder.

Rightmove's analyst, Miles Shipside,  comments: 

“The onset of spring is traditionally when the housing market swings into full-on action, and while the early Easter this year could be credited with its very active current state, the housing market actually received a much earlier kick-start at the end of November. Chains need a buyer at the bottom to enable everyone to move, and that was boosted by investors looking to avoid the 3% levy introduced on April 1st."

Although April saw demand at the bottom sector of the market fall away, thanks to the end of the pre-April BTL surge, with prices falling 1.4%, the rest of the market has continued to push on.

The positive 'chain reaction fuelled by the 'BTL surge ' has enabled owner-occupiers to sell at the cheaper end of the market and trade up, and so on....

This has meant the typical second-stepper sector (three or four bedrooms excluding four bedroom detached properties) has seen prices go up by 0.6% (+£1,512) in April month, a rise of 8.6% (+£20,519) over 12 months. 

Those at the top of the ladder’ (four bedroom detached and five bedrooms or more) saw the biggest April rise,  up 1.9% (+£9,970), bringing the annual growth rate to 5.1%.
Rightmove's analyst, Miles Shipside,  comments:

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. 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. 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.

It appears that first time buyers are becoming increasingly excited to have less competition and the 3% advantage over their 'landlording' rivals, with Rightmove experiencing its busiest March on record.
Rightmove's analyst, Miles Shipside,  comments: 

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. 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.”

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