House sellers’ average asking prices are just £30 below their all-time high levels as a lack of choice for buyers adds to the upward pressure on values, estate agents Rightmove reported.
And as people aged 55 and over prepare to get their hands on their pension pots from next month as a result of new freedoms introduced by the Government, the property website said that a rise in retirees looking to snap up buy-to-let properties could drive house prices higher.
The average new seller asking price across England and Wales was £281,752 in March, which is 1 per cent higher than the previous month and £30 below an all-time high recorded in June last year, Rightmove said.
It said that buy-to-let investors cashing in their pension pots to raise larger deposits may drive prices up further at the “starter home” end of the market, meaning first-time buyers could face tougher competition for homes.
Estate agents have already reported an uplift in interest from investors ahead of the new rules coming into force on April 6 which will give people the freedom to take their pension pots how they like.
Rightmove director Miles Shipside said: “Agents report a high level of interest from new landlords, or ‘granlords’, who are typically first time, retirement age, buy-to-let investors.
“With the highest returns for the lowest investment being at the lower end of the market, the first-time buyer property sector will be the greatest recipient of any increase in demand from investors with substantial pension pots.
Unfortunately flats and terrace houses with two bedrooms or fewer are coming to the market in smaller numbers than the middle and upper tier sectors, so are the least prepared for an upsurge in demand.” Rightmove said the asking price for a typical first-time buyer home has already increased by 7.6 per cent over the last year to reach £169,414 on average.