News As bottom end of property market booms, London Estate Agents express disappointment

Published by AgentPro on 27th February, 2018

NAEA Propertymark today issued it’s January Housing Report, which shows that the number of house hunters looking for new homes rose by 37% in January.

It certainly looks like an industry boom.  The NAEA research shows rising demand AND rising supply, as well as an increase in the number of sales agreed.

Despite the apparent pick up, however, increased competition at the lower end of the market meant that sales to first time buyers were stifled, and sales to them actually fell in January.

Mark Hayward, Chief Executive, NAEA Propertymark said:

“As we usually see in January, buyers and sellers have re-entered the market after the festive slow-down and triggered an uplift in the number of sales agreed. While this is good news for the market generally, the increased competition seems to have affected FTBs, who generally have less bargaining power when it comes to bidding for properties.“Our members have noticed FTBs holding off on making purchases typically outside of London, and saving for longer to maximise the full stamp duty relief. They’re skipping the ‘first time home’ and moving straight onto their second homes, to avoid growing out of their property in four or five years and facing the cost of stamp duty. This is a smart move and an example of how FTBs are making legislation work to their advantage.”

While many estate agents were pleasantly surprised by the increase in enquiries, the news was not so well received by London estate agents, many of whom had already predicted that the ‘entry level’ stamp duty cut was not enough to get London’s stagnated property market moving again.

James Morton of high-end London Estate Agents Benham & Reeves, said movement at the bottom end of the market was doing nothing to reinvigorate the London market.  James told Estate Agent News that the market desperately needs more extensive stamp duty relief:

“It’s encouraging to see some movement in the market at last, and of course we welcome this, but to hear that London first time buyers are being squeezed out of the capital isn’t something to celebrate.  We need nurses, police officers and other hard-working public servants to fill the talent shortages London is facing – we need these young professionals to stay in the Capital.“Only helping first time buyers is short-sighted – there is a finite amount of suitable properties for them, not just in London, but everywhere else too. Extending relief to second time purchasers and buy to let landlords, who cannot afford to pay punitive property taxes, would get the whole property market moving again. Property taxes are illogical, dated and hugely damaging the market.“The issue is being felt most acutely in London – it’s time common sense prevailed in Government decision making.”