Buyer interest across the UK property market has surged in recent weeks, and was certainly boosted exponentially by the recent stamp duty changes. After Rishi Sunak raised the tax threshold to £500,000 for homebuyers, demand for property hit record highs.
Now, new forecasts from Really Moving show how this could impact house prices. According to their research, prices in England and Wales could rise by 1.9% between June and September. This takes into account a dip in August of 1.4%, followed by a 4.7% rebound in September.
The firm believes that as more buyers flock to the market and transactions begin to complete, the housing market will receive a much-needed boost. Both buyers andsellers who had held off will return in record numbers, says the firm.
Rob Houghton, chief executive of Really Moving said: “Buyers took a cautious approach when the housing market first reopened, but we’re now seeing a clear surge in activity levels and a corresponding rise in sale prices being agreed.”
“There is little positive economic news on the horizon, but buyers who are confident in their jobs and financial position may be deciding to press ahead now rather than wait indefinitely – especially as many have already held off for months or even years awaiting a Brexit resolution.”
Low interest rate environment ideal for investment
Chancellor Rishi Sunak raising the stamp duty threshold to £500,000 will certainly play a part in increasing transactions. Many buyers will now save thousands as a result of the tax cut. This applies to owner-occupiers as well as investors and property owners, who still have to pay the 3% surcharge.
Another major factor benefiting homeowners and buyers right now is low interest rates. According to Rob Houghton, the stamp duty change along with attractive rates on borrowing “will encourage [buyers] further”.
With the Bank of England base rate remaining at a historic low of 0.2%, many lenders are offering cheap deals. Despite early restrictions on valuations and lending early on in the pandemic, the market has now opened up. Product numbers are rising, with extremely competitive rates available.
Specialist broker Mortgages for Business has urged property owners and investors to expand their portfolios now. For those in a position to re-mortgage or reinvest, the climate is working in buyers’ favour.
Stephen Olejnik, managing director, said: “Landlords have been preparing since the start of the lockdown, re-mortgaging to enlarge potential war chests with an eye on bagging bargains in the future. First-time buyers don’t have that flexibility and owner-occupiers haven’t been re-mortgaging in the same way.
“That means landlords are currently very well-placed to seize the day. However, that advantage won’t last forever. That’s why smart investors will start expanding their portfolios immediately, rather than waiting and then scrambling to try to do deals at the last minute.”
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Eleanor Harvey
