First-time buyers have a “window of opportunity” in 2017 with more choice and negotiating power, according to property website Rightmove.
Rightmove said there was a rise in the supply of smaller properties typically bought by first-time buyers compared to the same period a year ago.
This is because they are competing against fewer buy-to-let investors who last year were looking to close deals before the April stamp duty deadline.
The number of sales agreed in the typical first-time-buyer sector of two bedrooms and fewer was down 13.2% in December compared to the same month in 2015.
As a result, available stock for sale in this sector is up 1.9% compared to last year, offering more choice for first-time buyers. This contrasts with the same period a year ago, when available stock fell by 18% as active buy-to-let purchasers reduced choice and limited buyers’ ability to negotiate.
A restraining force on potential first-time buyer activity is increasingly stretched affordability.
The average house price went up for a first-time buyer went up 6.4% in the last year to £188,612.
Miles Shipside, Rightmove director and housing market analyst, said: “Those planning to buy their first home in 2017 have more choice of properties and less competition from other buyers than their counterparts a year ago.
“It’s a possible learning point for aspiring first-time buyers that a year ago buy-to-let purchasers acted more quickly and closed deals at a faster rate, appearing not to take a Christmas break. Admittedly they had the financial incentive of a deadline to motivate them, but first-time buyers still have time to act and currently have the incentive of stronger negotiating power to try and mitigate the upwards trajectory of property prices.”
Average annual house prices went up 0.4% for the month to £300,245.
The East of England recorded the biggest rise in prices for the year, with a 6.1% increase taking the average price to £332,088.
However, in Wales and the North East prices have dropped to lower than a year ago.
In Wales house prices have fallen 1.1% to £164,291, while in the North East they are down 1.7% to £139,527.
“Those planning to buy their first home in 2017 have more choice of properties and less competition from other buyers than their counterparts a year ago. It’s a possible learning point for aspiring first-time buyers that a year ago buy-to-let purchasers acted more quickly and closed deals at a faster rate, appearing not to take a Christmas break. Admittedly they had the financial incentive of a deadline to motivate them, but first-time buyers still have time to act and currently have the incentive of stronger negotiating power to try and mitigate the upwards trajectory of property prices,” said Shipside.
Richard Sexton, director of e.surv, said: “These first figures of the New Year show that the property market has started on a strong foot. With record low mortgage rates, lenders are continuing to help a wide range of prospective buyers to secure a mortgage. However, in many areas, annual price inflation is still rising at an uncontrollable rate compared to wage earnings.
“This issue of affordability is a growing problem, with prices moving out of reach for many buyers, but a new year can mean new opportunities. The recent Government announcement of £1.2 billion being provided for the Starter Homes Land Fund is a step in the right direction, and the Housing White Paper will hopefully promise further change. Initiatives like these have the opportunity to create a housing market that is fair, sustainable and open to everyone.”
