Now that the stamp duty tax increase for second home purchases became effective on 1 April, it is expected that the buy to let mortgage market will decline. It had been the intent of landlords to save money and beat the stamp duty hike by adding to their portfolios before the deadline. Therefore, there was a boost in the mortgage and housing markets over the several past months.

However, as landlords are bowing out, first time buyers are taking their place.

A UK estate agency, Haart, reported that the average house price had increased 4.1% in the year to February, but the average house price for first time buyers had grown to 9.8%. This was the highest level in six months to a value of £176,281. The month to month growth from January to February was 0.8%.

Demand is still outpacing supply on the housing market. There were 14.9 buyers for every property in February according to the Haart’s data. This was up by 21.5% in comparison with the same time last year, but down from January by 2.7%.

Currently agents across the UK report a lack of properties coming onto the market, and few already on the market to meet demand.

Paul Smith, chief executive of Haart, said, “First-time buyers flooded the market in February, with the number of registrations up a huge 22.7 per cent on last year and up 7.6 per cent since January, the highest monthly increase in nearly a year. However as demand from first-time buyers has increased, so have prices.”

Mr. Smith added, “The buy-to-let market began to cool in February as most landlords sought to finalise their purchase before March, allowing time to complete before the April deadline for new rules on stamp duty.

“However despite the temporary lull in the buy-to-let market, there is no reprieve for first-time buyers, who are still facing intense competition for properties. A shortage of new homes coming on to the market is still making their property search difficult, and today’s data shows that competition for properties will only increase as we enter spring, which is one of the most popular times to buy a new home.”