According to a report in Property Wire this week, we could be about to experience some long-term stability in the housing market, thanks to the gentle easing of government support, coupled with a gradual slowdown in the growth of house prices. Talking to Property Wire about the slowdown, Independent Estate Agent and Managing Director at James Leigh Property Management, Robert Burdett, said:
“Figures published by both Zoopla and Rightmove show that, although house prices are still outperforming the same period in 2019, growth compared with April and May is slowing.
“Whilst the Stamp Duty Holiday threshold has now been set at £250,000 until the end of September, the reduction of the Stamp Duty discount is having the calming impact that we anticipated. However, indications are that those people who agreed sales in April and May are still going ahead with their purchases.”
According to the latest figures from June, the housing market remains buoyant, but demand continues to significantly outstrip supply, which is forcing house prices to increase. This is happening more in rural areas like Dorset where people with expensive homes in London have decided to ‘escape to the country’ during the pandemic. Compared to house prices in London they can afford larger properties in the countryside and experience a positive change of lifestyle. After the lockdowns, more people have realised that they don’t necessarily need to live in a city to work – and that it is generally possible to work from anywhere in the UK. They are also craving gardens and open spaces more as the pandemic and more time at home have given them time to reflect on what they really want out of their home environment. After July 19th (‘freedom day’) more workers should have a clearer idea of whether it is feasible to move to the country as businesses will be able to provide critical information to employees – with some level of certainty – on how they will be able to work in the future, with the potential for a more flexible approach to working conditions.
Recently it has also become easier for first-time buyers to access finance, with a greater range of mortgage products, the return of 95% LTV and the Help to Buy Scheme, which mean that this market segment is beginning to gather momentum again, as Robert Burdett concurs:
“It is clear that throughout the pandemic people have continued to buy and sell homes, and are set to continue to do so. The first-time buyer market and top-of-the-ladder market are very buoyant, so on the face of it, a slowdown could be viewed as negative. That isn’t the case though. We need the market to take a breath and allow more properties to come to market to improve the current lack of supply so that house prices stabilise to a more sustainable level of growth. ”
The burgeoning housing market also means that around 1.8 million homes in the UK have moved into a higher Stamp Duty band and as we reported on the blog earlier this year, homebuyers are continuing to search for homes that offer more space, with room for home-working or a home office in rural areas that have good transport links to cities. Homes which offer buyers the opportunity to improve their lifestyle are now a top priority and have become highly sought after.
“Buyers are looking for particular features in their new homes, including office space, larger gardens, and rural areas, so there will be pressure on prices for these types of properties and locations. So it’s critical that the supply of properties with these features and in these geographies come to market. Continuing, Mr. Burdett said, “We expect the market to slow temporarily as the supply issue resolves itself. We anticipate that those sellers who have been holding back from putting their properties on the market during the pandemic will now start to do so in the coming months.” – Robert Burdett
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