- New listings for homes with two or fewer bedrooms jump 6.6%
- Sellers are rushing property to market ahead of tax changes
First-time homebuyers in London are enjoying a dip in house prices as more properties enter the market and a post-Christmas lull depresses demand.
Asking prices for homes in the U.K. capital fell 0.9 percent this month, the least buoyant January performance for four years, property-website operator Rightmove Plc said on Monday in a monthly report. New listings surged 13 percent from a year earlier.
Nationally, listings of properties with two or fewer bedrooms -- a popular choice for first-time buyers -- jumped an annual 6.6 percent. Prices in that category rose just 0.1 percent this month, lagging a 0.5 percent increase in the national average. That marks a respite for buyers who’ve suffered through what Rightmove described as a “stock-starved era,” with prices moving further out of reach because of a widening supply-demand imbalance.
Sellers are probably rushing to put homes on the market ahead of tax changes announced by Chancellor of the Exchequer George Osborne. Starting in April, buy-to-let and second properties will be subject to a levy 3 percentage points higher than on homes that are the main residence. The Bank of England said Friday that landlords may be set to splurge on investment properties before the tax rules take effect.
“For several years buy-to-let investors have been enticed by high tenant demand and attractive returns,” said Rightmove director Miles Shipside. “But as their window of opportunity starts to close it already appears to be opening wider for first-time buyers.”
The Rightmove report also highlighted a sharp drop in prices in inner London, where values fell 2.1 percent to 788,399 pounds ($1.13 million). That’s partly due to a higher tax on the most expensive homes. Outer London registered a 0.1 percent increase, with particularly strong demand in the southeast. Nationally, the average asking price in January was 290,963 pounds.