House prices: how to navigate the summer housing market
August 2021 : The Sunday Times
You may have missed out on the stamp duty deadline on June 30, but there are still plenty of reasons to buy and sell this summer.
It’s quieter now: The market has now calmed after a phenomenal surge of buying activity — HM Revenue & Customs reported this week that more than 200,000 people bought in June, when conveyancers, mortgage brokers and estate agents were working round the clock. Jeremy Leaf, a north London estate agent, says: “Transactions are certainly proving more straightforward as lenders, solicitors, surveyors, search providers and removers are responding more quickly. Activity has fallen, but we don’t know yet how much further it has to go and what will be the impact on prices over the next few months.”
The stamp duty holiday isn’t over: The tax is reduced in England and Northern Ireland until September 30. You can still save up to £2,500 with the threshold at £250,000 until it returns to £125,000 on October 1. Meanwhile first-time buyers have returned to their £300,000 threshold for properties priced up to £500,000, giving them a slight advantage over other buyers.
Beat the (next) rush: “Between now and September a buyer could well find that there is less competition than they might expect for ‘best in class’ property, as many people are now planning to be away for the entire summer and have abandoned their property search until their return,” says Sophie Bonsor of buying agency Aykroyd & Co.
Marc Schneiderman, director of Arlington Residential, a London estate agency, says: “The market has settled a little. Pent-up lockdown demand has subsided and whilst we are still seeing competing offers on most ‘best in class’ properties, we can sense a slight shift in the balance of power from seller to buyer.”
Jason Corbett, head of country property at UK Sotheby’s International Realty, adds: “Because the usual ‘seasonal market’ is so out of sync as a result of Covid, we are taking on a number of very good properties now, which is not something that typically would have happened in mid-July.”
Meanwhile, international buyers are not expected to return in any great numbers until the autumn. “There is much pent-up demand from overseas buyers and many clients plan to come over to the UK as soon as it is easier to travel. The relaxation of the travel rules is likely to have a much bigger impact on the market than ‘freedom day’ with overseas buyers aiming to arrive here in October,” says Bonsor.
Grab a mortgage deal: Interest rates are at record lows, with the Nationwide just announcing two and five-year fixed deals at less than 1 per cent. Mark Harris, chief executive of the mortgage broker SPF Private Clients, says: “Just when it looked as though mortgage rates couldn’t possibly go any lower, they have. As lenders are cash-rich and eager for business, we wouldn’t bet against others following suit and offering similarly cheap products in coming weeks.”
First-time lucky: OK, so property prices have risen dramatically in the past year, but there are still a few reasons for first-timers to be cheerful, including: the recent launch of the government’s First Homes scheme, offering 30 per cent discounts on new-build homes; the ongoing Help to Buy programme, which will close to new applicants in December 2022 before fully closing in March 2023; and the new government-backed mortgage guarantee schemes, offering loans to those with 5 to 10 per cent deposits.
Don’t miss a sale: There are lots of buyers ready and waiting. Many of these missed out on a purchase earlier this year in the stamp duty holiday frenzy. Rightmove, the property portal, estimates that there has been a shortfall of 225,000 properties in the past year.
They’re serious: Buyers have, more than ever, done their research before they come on a viewing. Schneiderman says: “We have seen a behavioural change amongst buyers as far as viewings are concerned, in that prior to arranging any physical inspections buyers are now driving or walking past the properties and only then, after viewing the video and seeing the floorplans and photographs, will they arrange an in-person visit. This eliminates unnecessary viewings of unsuitable properties and effectively results in fewer inspections, but with a far greater likelihood that the outcome will be an offer to purchase. With this is in mind, sellers should be as accommodating as possible on viewing requests, in the knowledge that before the proposed buyer has even walked in the front door, they will have a very clear idea of what they are coming to see.”
. . . so you need to be serious: Jason Corbett says: “We have found that many vendors with second homes abroad have ‘decamped’ for the entire summer so that they can be with their families for holiday and can also work. Our advice to these clients is to allow us access to their properties, as there are still some very motivated buyers keen to purchase before September.”