Have you been spotting ‘for sale’ and ‘sold’ signs lately? Drive down any residential road and there seems to be loads wherever you look.
Ever since July, when Chancellor of the Exchequer Rishi Sunak announced that he was putting a freeze on stamp duty until 31 March 2021, the property market seems to have gone into overdrive.
As a measure to reactivate sales after the first Covid-19 lockdown was lifted, it has certainly worked. With the ‘nil rate’ band temporarily increased from £125,000 to £500,000, buyers are rushing to seize this very attractive opportunity and there is much more housing stock available as people re-evaluate their living circumstances in light of how Coronavirus has been shaping the way we live and work.
What does the stamp duty freeze mean?
On average, buyers can save £4,500 but on higher priced properties, the saving can be as much as £15,000. With all the associated costs of moving house taken into consideration, these savings are not to be sniffed at. Just think of what that money might buy, from getting new furniture to being in a position to make certain home improvements far sooner than previously anticipated.
According to Zoopla the number of mortgages approved in October hasn’t been this high since 2007, with almost 100,000 approved. The market remains very buoyant, bucking the usual trend of interest dying down over the Christmas period, and there is every likelihood that January will also see a high volume of sales.
What it means for the property market
So, brilliant news for buyers and great news for us, too – demand for surveys is high and we’re not complaining about being busy! Not surprisingly thought, the downside is that many in the industry are now struggling because of the volume of work being generated. From mortgage providers faced with a huge amount of mortgage applications to process and approve to solicitors dealing with all the legalities prior to completion, everyone is feeling the strain.
The knock-on effect is that the process is slower than normal, especially while estate agents, lenders, conveyancers and surveyors are working remotely or having to adhere to social distancing guidelines – nothing is normal anymore.
As March looms – three months in the property market is not a long time – concerns are now being voiced. In normal times, 92% of sales agreed in November and 81% of those agreed in December will be successfully completed before the end of March. So alarm bells are now ringing, especially if there is a sales spike in January – there is every potential for many buyers to suddenly be faced with the reinstated stamp duty costs. The pressure is huge.
Will the stamp duty freeze be extended?
This is what we all want to know. Representatives of the industry have asked the Chancellor to extend the freeze by six months and so ease the backlog, supported by petitions from the general public. We’re still awaiting any decision on this and whether the government will cave in to demand is unclear.
In the meantime, if you’ve had an offer accepted we’d advise that you book your survey as soon as possible. The more proactive you can be, the faster your sale will progress.
Do please get in touch if you’d like to find out more about our building surveys or to book a date.