The latest House Price Index from Rightmove for March 2012 has been published. The results seem to show a stronger market. The average asking price for March is £236, 939. This is a rise of 1.6% on February (£233,252). It also represents a yearly increase of 2.2%. In the first three months of 2012, asking prices have risen by 4.9%. This is the strongest start to the year since 2004.
The types of property which have seen the biggest price increases are flats and terraced houses. These are typically the types of housing which are purchased by first time buyers. Terraced house prices rose by 2.8%. Flat prices increased by 3.1% since 2011.
This suggests that when the Stamp Duty holiday for first time buyers ends on Friday this may affect the market. Currently 40% of the properties on Rightmove are in the £125,000-£250,000 price bracket and are potentially affected by this, as the number of first-time buyers able to afford the associated costs of moving falls.
Director of Rightmove, Miles Shipside comments:
“For a first-time buyer it’s already hard enough to raise the necessary deposit and now, as well as potentially losing between £1,250 and £2,500 in stamp duty exemption, asking prices for their target property types have increased by over £5,000 in the last year as well. The stamp duty holiday was designed to promote activity in the moribund housing market, helping first time buyers to get onto the housing ladder, and as a consequence releasing others to climb up the rungs too. With some promising indicators of activity so far in 2012, there are finally some signs that this is playing an important role. The question is: can the Chancellor afford to spring a surprise and extend the stamp duty exemption? If not, what are the potential costs of leaving the UK re-sale property market without any incentives?”
Rightmove also reports a 16% increase in search activity in 2012 compared with 2011. Alongside this, the average time that a property is on the market has dropped by 20 days since January.
These statistics from the start of the year seem to show a strengthening market. Whether it can cope with the loss of the Stamp Duty exemption will be seen in the next few months.
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