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Number of two bed flats for sale jumps 6.6%

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  • 18/01/2016
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Number of two bed flats for sale jumps 6.6%
The number of available homes with two bedrooms or fewer have increased 6.6% year-on-year, the highest since 2007, new research shows.

Prices for these properties are at a standstill, increasing by only 0.1%, or £209, between early December and January 2016, figures from property website Rightmove show.

Stable pricing and a larger supply would benefit mostly first-time buyers and landlords looking to beat the Stamp Duty Land Tax surcharge of 3% on buy-to-lets and new homes, indicating the tax changes could have a calming effect on the market much sooner than expected, Rightmove said.

Miles Shipside, director and market analyst for Rightmove, said: “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.”

Prices in the mainstream market have increased by 0.5%, or £1,509, between December 2015 and January, the second highest Christmas and New Year period rise since 2007.

Jeremy Duncombe, director of L&G Mortgage Club, said: “This monthly increase in house prices is unusual for this time of year, and we expect house price inflation to climb further over the course of the year.

“The lack of supply is making the market more competitive and an expected increase in demand in the coming months is likely to exacerbate this issue. The government and housebuilders must work together to address this problem by building more properties of the right size and in the right places to accommodate those looking to buy,” he said.

He said the government must encourage more efficient use of current housing stock by helping people to ‘rightsize’ through tax incentives and cuts in Stamp Duty.

“This two-tiered approach will help reduce the current imbalance between supply and demand and make homeownership a more achievable goal for many.”

Adrian Whittaker, sales director at New Street Mortgages, said: “With this imbalance between supply and demand, the speed of a mortgage application could make the difference between having an offer accepted and losing out to another buyer.

“This makes it is even more important than ever for advisers to choose a lender that has the right technology and processes in place to offer a service that meets the demands of this fast-paced environment,” he said

Demand has also increased, with visits to the Rightmove website increasing 21% in the first working week of 2016 compared to the same period last year.

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