UK house prices: Rightmove reports surge in demand but prices remain flat

Demand for properties in Britain surged in December and January, according to figures published by house-hunting website Rightmove today (18 January 2016). Data showed the number of visits to the website for the first week of January were 16% higher than in the corresponding period last year, while house prices edged 0.5% higher from December to January – the second-highest increase in the period since 2007.

The slight uptick in house prices was the first increase in two months, after Rightmove's monthly House Price Index reported a 1.3% decline between November and December and a 1.1% fall in the previous month.

"Encouragingly for first-time buyers there's more fresh choice with more property coming to market in their target sector," said Rightmove's co-founder Miles Shipside.

"With their asking prices pretty much the same as a month ago, perhaps the knock-on effects of the more punitive landlord tax regime have arrived early and they now face a dilemma over whether to buy now or wait to see if prices drop in this sector over the next few months."

Rightmove added that the supply of one and two-bedroom properties grew by 6.6% compared with the corresponding period in 2015, although all the other sectors registered a decline in supply. Shipside added that first-time buyers could benefit from an increased supply of smaller properties, particularly as prices for houses with two bedroom or fewer grew just 0.1% year-on-year in the period.

"Perhaps because of the increased competition among sellers and a keenness to attract buy-to-let investors before the April deadline, prices have hardly increased month-on-month for properties with two bedrooms or fewer," he said.

"In this stock-starved era, it will come as a relief to first-time buyers that their negotiating power may already be improving because the forthcoming tax changes, and there is a window of greater choice as more owners of smaller properties try to sell."

According to Rightmove, January presented first-time buyers or existing tenants wishing to move up the ladder with a rare chance to secure a good deal in the market.

"Rather than waiting until later in the year, having a good look around now while choice is up and interest rates remain unchanged could get you onto the ladder sooner and at an acceptable price," said Shipside.

"For several years, buy-to-let investors have been enticed by high tenant demand and attractive returns, but as their window of opportunity starts to close it already appears to be opening wider for first-time buyers."