When the Chancellor unveiled his Spring Budget earlier this month, all ears were on a Stamp Duty Land Tax (SDLT) holiday extension that would save the hundreds of thousands of pipeline transactions and give fresh impetus to a waning or, to some commentators, a cliff-edge, housing market.
The Chancellor came good and then some with a ‘Generation Buy’ campaign to inspire FTBs and get the nation moving with a return to the widespread availability of 5% deposit mortgages. The SDLT holiday was duly extended until the end of June with the added bonus of taper introduced to deliver a fall from the nil-rate band to £250,000 in July until the end of September – a move that will coincide with the end of the furlough scheme.
The result was a much-needed boost for the housing market that, far from feeling like a temporary fix, appears to have heralded an aura of post-budget positivity that, according to the UK’s property and financial experts, looks set to run and run.
Capital Economics is one of the world’s leading independent economic research companies and has now revised its forecast from a fall of 4% in UK house prices this year to a rise of 3%, while its 2022 prediction for prices rising by 2.5% remains the same. It also notes that ‘high lockdown saving, the incentive to move from remote working, and a raft of fiscal policy support suggests that transactions will remain high and house prices will continue to rise for most of this year.’
Despite general assumptions that unemployment will peak at around 6% this summer and Covid’s vaccine progress and lockdown easing will continue as planned, this is encouraging news that bodes well for the industry beyond 2022.
New data from Rightmove also gives a hugely positive snapshot as to how the land lies today in the housing market:
This week, Rightmove has headlined ‘the strongest spring housing market for home sellers in a decade’.
With demand levels 34% higher than the same time in 2021 when the pre-lockdown market was incredibly buoyant, it’s clear the numbers of buyers enquiring about properties alongside those listing their properties are, indeed, fuelling this surge. Rightmove is also standing by the 4% house price growth forecast it made in December 2020.
Rightmove’s housing market expert, Tim Bannister, lends his weight on views on the ‘strong decade’ claim: ‘Record low interest rates and the new focus on what your home needs to offer after several lockdowns have led us to the greatest excess of demand over supply in the last ten years.
‘This strong sellers’ market is good news for those who are looking to put their home on the market as the traditional Easter selling season approaches. Blossoming buyer demand coinciding with blossoming gardens should put a spring in the steps of sellers, and more of them coming to market will provide a much-needed increase in the choice of property for the many who are looking to buy.’
For those sceptical of a cyclical boom and bust era to follow, a gentle reminder that the Mortgage Market Review’s 2014 affordability stress tests and tighter lending criteria still represent powerful tools that will guard against over-stretching and pricing volatility.
Rob Mott, Chairman of the Charters Group has underlined his organisation’s confidence in the market by expanding its branch network that already reaches across Hampshire and into Surrey still further.
‘We share the optimistic view of others in the property market’, he reveals. ‘Thanks to a combination of the government’s keenness to support first-time buyers, who now need to save considerably less to secure their first home, the expectation that low-interest rates are here to stay for some time yet and the extended SDLT holiday, there are concrete reasons to be positive.
‘But more than that, there is a distinctly upbeat feeling amongst buyers and sellers who simply want to get moving after the stifling effects of the pandemic. Whether it’s to move home to accommodate our all-new working-from-home culture or to put quality of life first and relocate into a more rural setting, there is, without doubt, a taste for a more holistic, home-led lifestyle. The choice now for buyers is to find a property that puts that first.’
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