UK housing market registers slowest September growth since 2010

Slowdown gives first-time buyers chance to find favourable deals, say estate agents

Tax changes have made property investment less lucrative (PA)

The UK property market has recorded its slowest September growth for eight years, new data has revealed.

House prices traditionally rise at this time of year as the number of properties on the market falls, but new figures show an increase of just 1 per cent for the month – the lowest since 2010.

Homes with two bedrooms or fewer dragged the average down with a 0.1 per cent fall for the month, partly due to a reduced number of sales to buy-to-let investors.

Tax changes have made property investing less lucrative, causing some investors to shift their money elsewhere and giving first-time buyers an opportunity to find favourable deals, according to Rightmove, who compiled the data.

Smaller properties, which have been favoured by investors, now take 58 days to sell on average, up from 55 days in September last year.

The data suggests higher taxes on landlords are having the desired effect, with new buy-to-let mortgage approvals falling 14 per cent from last year and by more than half over the last three years.

Landlords were hit with a 3 per cent stamp duty surcharge on property purchases back in April 2016, and income tax relief on mortgage interest payments has been drastically reduced.

“With the government using the tax system to try and help first-time buyers while deterring out of favour landlords, prices in this sector have been subdued as intended,” said Rightmove director Miles Shipside.

“That gives aspiring first-time buyers an autumn opportunity to negotiate a favourable deal.”

Prices rose just 0.9 per cent over the year, the lowest annual rate since February 2012. The slowdown will come as welcome news for those trying to buy their first home – average asking prices have jumped more than a third in seven years, while wage increases have remained subdued.

Robert Lazarus, managing director of sales at Paramount Properties in northwest London, said there was now a better opportunity for first-time buyers coming into the market compared to a couple of years ago, especially if they are looking for a one bedroom flat.

“Before the additional stamp duty on second homes came in we were selling 20 per cent of these flats to landlords, which was driving prices up,” he said.

“Now we’re selling less than 5 per cent of them to landlords, giving first-time buyers the first pick of new stock that comes on.”