We may not be quite out of the Covid-19 woods yet but the easing of the related lockdown rules across the UK has brought a smile to the faces of many. There is much to celebrate in the property market too – with positive sales figures reflecting the ongoing trend for strong market conditions. According to Rightmove, the current market is now the fastest-selling market it has measured since its records began.
Government led initiatives such as the stamp duty tax break, and the re-introduction of 95% mortgage products supported by the government mortgage guarantee scheme , has meant that despite challenging conditions due to the Coronavirus pandemic, buyers are still purchasing, moving and climbing the property ladder.
Stamp Duty Holiday
The scheme has been extended throughout the Spring to the end of June with a staged withdrawal to follow. From 1 July 2021 to 30 September 2021 the nil band rate will apply to properties valued at £250,000 or under. From 1 October 2021 the figure will revert to £125,000 – the pre-Covid valuation.
Following Chancellor Rishi Sunak’s Budget speech at the beginning of March which detailed the extension of the stamp duty holiday to June 30th, buyer demand spiked by 24%.
95% Guarantee Scheme
Introduced on the 19th April, the Government will guarantee all mortgage products on residential properties valued at £600,000 or under where the loan is worth 91% – 95% of the total.
This has been introduced to bolster the lower rungs of the housing market by allowing first time purchasers to enter the market without the need for prohibitive deposits. Existing mortgage owners will also be eligible for the mortgage deal enabling them to take the next step in their property journey, or for example make home improvements.
A good time to move
Henry Knight, Managing Director of mortgage brokers Springtide Capital, said the market was looking good going into spring.
“There is a real air of positivity about the marketplace as we enter the spring months. There’s no doubt that the Government’s extension of the stamp duty holiday, combined with the newly introduced 95% loan-to-value guarantee scheme, have given buyers increased confidence.
“Combined with those people who have chosen to make a lifestyle change on the back of living at home for most of the last year, and those who are looking for more space in more rural locations, we have seen increasing numbers making enquiries in the market and taking up mortgage offers.
Spring Market
A recent Rightmove survey found that March 2021 saw the greatest excess of demand outstripping supply over the past ten years. The number of potential buyers enquiring about available properties is at a record high, and 34% higher than the same period in 2020.
In April 2021, Rightmove have reported in their house price index that prices hit a record high and that properties are selling at the fastest pace ever recorded. The number of sales agreed up by 55% on same period two years ago, reducing the stock of properties that are available to buy to the lowest proportion ever recorded with two- and three-bedroom semi-detached homes selling fastest.
Zoopla’s research and insight team reported that while the impact of coronavirus will continue to be felt for some time to come the property market remains strong. It also predicted other Government strategies are to be expected that will continue to support the housing market, a positive for buyers and sellers alike.
To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.
Sources:
https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
https://www.gov.uk/government/publications/the-mortgage-guarantee-scheme
Buyer demand soars as stamp duty holiday is extended – Zoopla
House Price Index | Property blog (rightmove.co.uk)
7 factors that will shape the housing market in 2021 – Zoopla