According to property website Rightmove the demand for property has not abated despite the second lockdown. During the first six day of the new restrictions, they reported a rise in demand by 49% year-on-year, as buyers push ahead in order to complete their sales before stamp duty returns in March.
The Rightmove House Price index suggests that national sales agreed were up by 50% compared to October last year. They estimate that there are around 650,000 sales going through the buying and selling process at present – which is 67% higher than this time last year.
Speaking to PropertyWire about the increase, Director of property lender MT Finance, Tomer Aboody said:
“The mini-boom has been given a further shot in the arm with Lockdown 2.0.
“Sellers are being more realistic in their pricing and taking advantage of the demand.
“Some sellers were guilty of unrealistic pricing, believing buyers would pay through the roof but now, with the clock ticking before the stamp duty holiday ends in March, they’ve had to become more realistic and accept lower offers or reduce their pricing.
“Prices and volume levels are astronomically higher than this time last year, when we were facing the general election. Now, with the election long over, Brexit brewing and a possible vaccine for Covid-19, we are hoping for a strong end to the year, before the economic reality of the pandemic really hits.”
Surprisingly however, despite such strong market activity, the average price of property coming to market dropped by -0.5% between September and October.
North London estate agent Jeremy Leaf, who is also a former RICS residential chairman, suggested possible reasons for this:
“Although, of course, only reflecting ‘asking’ not ‘selling’ prices, the Rightmove figures confirm what we’ve been seeing on the ground for several weeks.
“History is repeating itself. Additional restrictions and the threat of another lockdown have delayed – not halted – property moves as buyers and sellers once again demonstrate their determination to negotiate hard and take maximum advantage of the stamp duty holiday.
“Nearly all are acutely aware that delays in arranging mortgages, valuations and conveyancing will mean meeting the 31 March deadline won’t be easy, even if deals are agreed in the next few weeks.
“We have also noticed that the prospect of a vaccine has given an extra boost to viewings this week, even though it is still very early days. But on the other hand, this may make some sellers less likely to accept what they regard as unrealistic offers.”
Given the current situation and uncertainty, Aboody speculates that it is likely there will be an extension to the current stamp duty holiday deadline:
“It would be surprising if the government didn’t extend stamp duty relief beyond March, so as not to coincide with the extended furlough scheme finishing.
“This would significantly help in propping up the market and needs to be coupled with continued cheap borrowing and the return of higher loan-to-values, to ensure the housing market doesn’t take a huge hit.”
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