Jump in Two-Bed Flats for Sale After Buy-to-Let Clampdown

Rightmove says availability of two-bed homes is at its highest since 2007, suggesting the chancellor's changes to stamp duty and tax relief is working.

More properties have become available for first-time buyers and prices have stopped rising, in what the property website Rightmove says is the first evidence that the chancellor's clampdown on buy-to-let is working.

Rightmove said there had been a 6.6% jump in "fresh-to-the-market" two-bed flats over the past year, the most sought-after sector in the first-time buyer market.

Availability of two-bed flats is now at its highest since 2007, according to Britain's biggest property portal, which suggested some buy-to let landlords may be selling up before changes to tax relief and stamp duty come into force.

Prices for two-bed flats are static. Rightmove director Miles Shipside said: "With the monthly price increase in this sector at a near standstill (+0.1%, +£209), this suggests that some of the dynamics of the changing tax regime for buy-to-let investors are starting to play out sooner than expected."

For several years buy-to-let investors have been motivated by strong tenant demand and favourable returns, but regulatory changes appear to be shifting market dynamics in favour of first-time purchasers.

In the summer the chancellor, George Osborne, cut tax reliefs for buy-to-let landlords, and in the autumn statement he increased stamp duty on investment properties.

Meanwhile, prices in the mainstream property market continue to rise. Rightmove said the price of property coming to market was up by 0.5% (+£1,509) in January compared with December. Demand as measured by visits to the Rightmove website in the first working week of 2016 was up by 21% on the same period in 2015.