House prices reached a record high in April, despite an increase in the stamp duty rate, new data shows.
According to Rightmove, the average asking price for a property across England and Wales was £308,151, a monthly rise of 0.4% (+£1,118).
The 3% stamp duty increase, which came into effect on 1 April, is part of the government’s attempt to curb the buy-to-let market and free up property for first-time buyers.
There was a price surge of 6.2% to £194,224 for typical first-time buyer properties with two bedrooms or fewer.
It was widely expected that investor activity drop-off after the stamp duty deadline would act as a brake on prices at the lower end of the market.
Miles Shipside, Rightmove director and housing market analyst, said: “First-time buyers are still eager to secure some of the very limited suitable supply in many parts of the country. Estate agents have perhaps been focused on getting investor sales through to completion before the tax hike, and some may have been surprised by the continuing momentum and scarcity of stock to meet ongoing demand.
“The net effect is eye-watering increases in asking prices in some towns, and is further stretching first-time buyers’ affordability even though they are competing against fewer buy-to-let investors in the market.”
Rightmove said the top property hotspot is Croydon, with Dartford and Luton also popular with commuters pushed out of the capital by rising prices.
Croydon recorded an 18.6% annual increase in the first-time buyer sector, taking asking prices to £297,770.
Dartford saw a rise in first-time buyer activity of 18.5% to £244,310, while Luton increased 18.4% to an average asking price of £186,900.
Conversely, six out of 10 regions contain some towns which have seen falls in average asking prices, with the largest drops in Llandudno at 7.5% and Darlington down 3.0%.
Shipside said: “The country’s top price-rise hotspot is Croydon, where Londoners priced out of some other parts of the capital have sensed a combination of convenience and value, aided by some serious regeneration. Dartford has also been a very popular and affordable area for London buyers prepared to commute from the South East region and also good for rental yields for investors.”
All regions have recorded growth in the past year, with London seeing the biggest rise in prices of 10.8% to £644,088. The East of England has seen house prices go up 10.1% in the last year to £646,200.
The lowest growth was in Wales, where average asking prices have risen 1.6% to £181,679.
