Autumn opportunities for first-time buyers

young couple first-time home buyers

First time buyers could find it easier to get a foot on the property ladder this autumn, according to a report published by Right Move, the company that runs the UK's largest online real estate portal.

First time buyers could find it easier to get a foot on the property ladder this autumn, according to a report published by Right Move, the company that runs the UK's largest online real estate portal.

The Right Move House Price Index  gives a national picture of the property market and is published on a monthly basis. October’s report shows that while traditionally this time of year does see a rise in house prices with an average increase of 1.6 per cent reported over the last five years, 2018’s increase is more muted at just 1 per cent, which is the smallest rise since 2010.

This increased affordability is likely caused by government’s efforts in using the tax system to help first-time buyers – namely imposing higher stamp duty and lower income tax reliefs on landlords – taking its desired effect. The report shows the sector with the slowest price rise is properties with two bedrooms or fewer, which actually fell in price by 0.1 per cent from the previous month. Of course, buy-to-let investors (or would-be landlords) would usually be competing with first-time buyers for this type of property, but being less active in the market thanks to higher taxation and fewer incentives, the supply of this type of housing is opened up to the first-time buyers.

Mortgage approval figures back up this theory – approvals for new buy-to-let purchases were down by 14 per cent compared to a year ago, and by 53 per cent compared to three years ago. On the other hand, first-time buyers saw their year-on-year mortgage approvals increase by 1 per cent.

Miles Shipside, Rightmove director and housing market analyst, said: “Government policy has sought to reduce this activity through higher landlord stamp duty and lower income tax reliefs and so tilt the balance back towards first-time buyers. Help to Buy is also encouraging first-time buyers to buy brand new homes and may to an extent be redirecting them away from the second hand housing market.”

Regarding the upcoming Autumn Statement – the chancellor’s bi-annual update to MPs on taxation and spending plans – he continued: “If the Chancellor’s budget later this month encourages more landlords to sell to long-term tenants for rumoured capital gains tax relief, then landlords who are looking to sell and renters who aspire to become first-time buyers could work together for their mutual benefit.”