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TODAY'S OTHER NEWS

Buy-to-let surge turns nasty for first-time buyers

The surge in buy-to-let transactions in the run-up to the stamp duty surcharge on 1 April has left first-time buyers facing a "nasty spring surprise".

March transaction numbers were up a massive 80% on last year leaving new buyers facing a property drought and price surge.

The average property favoured by first-time buyers jumped 6.2% in May, adding £11,298 to the cost, according to new figures from Rightmove, published today.

This followed a shortlived drop of 1.4% in prices for properties with two bedrooms or fewer in April.

By comparison, all property types rose by a modest 0.4% in May, or £1,118, taking prices to a new record of £308,151.

Demand remains strong despite the new stamp duty surcharge and impending cuts to buy-to-let higher rate tax relief.

At the same time, supply has fallen by 1.5% year-on-year.

First-time buyer regional hotspots such as Croydon, Dartford and Luton have seen prices surged by more than 18% in a year, adding to first-time buyer misery.

Miles Shipside, Rightmove director and housing market analyst, said: “If you were expecting a long period of price doldrums at the lower end of the market following the mass exit of the buy-to-let brigade, this month’s 6.2% price rise will come as a big surprise.

“Properties at the lower end of the market were the most common target for the investor community, and the immediate aftermath of the tax deadline saw new seller asking prices drop in this sector for just one month.

“It remains to be seen if these prices can be achieved and there may be some over pricing in the market.”

Brian Murphy, head of lending at Mortgage Advice Bureau, said the data shows that landlords haven't deserted the market.

"This is causing upward pressure on prices at the lower end, raising asking prices on properties that would be ideally suited to first-time buyers.

"This suggests continued demand from landlords, as well as those looking to get onto the first rung of the property ladder.”

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