With another lockdown period across November and December, the housing market has faced fresh challenges near the end of 2020.
At Austin Property Services, we are still operating, and of course, the stamp duty holiday is encouraging people to make a move soon. We know people are looking for guidance and information, and we are here to ensure you make informed decisions.
Richard Donnell, the director of research and insight at Zoopla, recently answered a range of questions on the property portal site. With the country enduring another lockdown, and the stamp duty holiday still in place, many people have questions about the market.
Therefore, it is pleasing to get insight from an important figure in one of the leading property portals in the country.
The market is hugely busy
Richard was asked about the record sales which were agreed in the wake of the first lockdown. House price growth reached 3%, and the sales pipeline was at least 50% larger than the previous year. It is natural Richard was asked if this was sustainable.
He responded by saying; “The post-lockdown surge in demand is almost unprecedented. And that’s because there are three cohorts of buyers in the housing market that you wouldn’t normally have. The first is buyers who were forced to put their moving plans on hold when the housing market was shut down as a result of the pandemic. The second is buyers who have been spurred on by a once-in-a-lifetime re-evaluation of their homes. And the third is buyers who want to take advantage of the stamp duty holiday. This sheer volume of buyers can’t be sustained for a prolonged period of time. So, it’s unsurprising that demand has slowed since the summer and has now returned to pre-Covid-19 levels. However, it’s important to put this into content – appetite is still more than 40% higher than a year ago.”
On the topic of the stamp duty holiday, Richard offered advice for first-time buyers and existing homeowners.
Richard said; “On average, it takes 100 days between a sale being agreed and completion. With the stamp duty holiday ending on 31 March, it’s all about getting prepared now to reduce potential delays. If you’re selling your home before buying another, you might not consider lining up a lawyer until you’ve agreed a sale. But you could shave weeks off the transacting timeline by instructing a conveyancer and estate agent at the same time. It will enable your conveyancer to prepare and get your home ‘contract-ready’ while it’s being marketed.”
Richard also said; “If you’re a first-time buyer, there’s still plenty you can do to pave the way for a smooth and prompt purchase. This includes getting your paperwork in order, such as securing a mortgage in principle.”
The stamp duty holiday is driving activity
It is natural many people are concerned the stamp duty holiday is driving activity in the market. Richard spoke about this by saying; “Stamp duty holidays have always distorted housing market activity and this one is no different. The stamp duty holiday announced by the Chancellor in July means that nearly nine out of 10 property transactions are no longer subject to stamp duty, with the average stamp duty bill falling by £4,500. So yes, it’s important and it’s added impetus. But it’s not the only factor driving housing market activity.”
Richard also said; “There are more deep-seated reasons why people are moving now. As I mentioned earlier, the pandemic has caused many people to carry out a once-in-a-lifetime re-evaluation of their home and this has been a greater underlying driver of activity. The latent demand that’s been unlocked by the pandemic, particularly among older homeowners, has the potential to run beyond the end of the stamp duty holiday.”