House prices remain subdued creating an opportunity for first time buyer house hunters as homeowners struggle to sell their home.
Homeowners are struggling to sell their properties according to Rightmove with the largest increase in average number of days to sell, up from 55 days to 58 days.
The slowest sector is two bedrooms with a -0.1% price fall due to fewer buy-to-let investors and means first time buyers have an opportunity to secure better deals.
Mortgages approvals for buy-to-let landlords are down -14% over the year and down -53% over three years whereas first time buyers approvals are up 1.0% year-on-year.
The difficulty selling homes means if may be easier for remortgage buyers to stay in their existing home if they can and avoid the cost of moving.
Prices not rising as expected
For those taking their first step on the property ladder, prices are 1.0% or £3,184 higher over the year and lower than expected being the lowest seen in the Rightmove October Index since 2010.
Miles Shipside Rightmove director and housing market analyst said, the government tax system help first time buyers by effectively awarding stamp duty free status in November 2017.
Landlords are clearly buying far fewer properties after being hit with a 3% stamp duty surcharge on property purchases back in April 2016 and that leaves a gap in the market for first time buyers.
The story at this time of year for the last five years has been an average autumn bounce of 1.6% in the price of property coming to market, says Mr Shipside.
The national average price of £304,061 rising only 0.9% and compares to home movers that pay £274,789 for a house which has increased 1.9% year-on-year.
For first time buyers, property values average £190,587 and house prices are rising slowly at 1.0% for the year.
London prices negative for the year
The only region in the country where house prices are lower is Greater London reducing by -1.1% or £7,156 over the past year with average property values of £625,064.
For affordability stretched first time buyers average house price for a new home are lower by -1.8% and they pay £479,802 whereas home movers pay £692,015.
The following table from Rightmove shows the annual change in house prices for different London travel zones to October 2018.
| Travel Zones | Average Price | Annual change |
|---|---|---|
| Zone 1 | £1,348,421 | 0.0% |
| Zone 2 | £748,012 | -1.7% |
| Zone 3 | £594,675 | -2.1% |
| Zone 4 | £484,840 | -0.2% |
| Zone 5 | £474,554 | -0.7% |
| Zone 6 | £487,350 | 1.5% |
The only London area to rise for the year is travel zone 6 up 1.5% with average prices of £498,865 which are higher than zones 4 and 5.
In Greater London new property to the market is up 1.4% or £8,563 driven mainly by the continued recovery of Inner London prices, the closer to the centre you get the greater the price recovery, said Mr Shipside.
Properties with two bedrooms have seen prices surge 92.1% in London from a low in 2009 to the peak of £506,755 in April 2016 and have since falling back by 4.2% with times to sell jumping from 40 days to 75 days.
A benefit of rise in London house prices is the older equity release buyer can access wealth in their property with a lifetime mortgage to maintain your lifestyle or gift a child or grandchild the deposit on their first home.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
Learn more by using the property value tracker chart, mortgage costs calculator and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to buy a more expensive home or reduce inheritance tax owed by your beneficiaries.
