Buying a house is one of the most important milestones in a person’s life, so it’s crucial to get it right. Government support, low mortgage interest rates, an increased emphasis on working from home, and better quality of life have given a boost to the sector. The property market of 2021 is shaping up to be savage – so, is now a good time to buy a house?
In the last year, The UK house price index has revealed a steady increase in house prices. The latest house price index by Halifax revealed that average house prices in the UK saw a record high of £254,606 in March. As reported by Nationwide, London has been the worst-performing region with the weakest growth of its annual prices, and the northwest has been the strongest performing region. The statistics come in line with various surveys that have shown an increase in the number of people who have either already moved out (or are planning to) of London and other urban areas since working from home adjustments have now become the norm.
How has Coronavirus and the lockdowns impacted the UK property market?
Numerous factors affect the property market – how fast the economy will recover, income growth, and levels of employment. The global pandemic has had a major impact, changing the way we use our homes. During the lockdowns, the government urged everyone to #stayathome and whoever could do so to work from home to reduce the spread of the virus. Attitudes towards working from home have changed, and it seems to be the beginning of a new norm, even as lockdown restrictions are starting to lift since employers are starting to introduce flexible working arrangements.
The new working arrangements have changed people’s location preferences as many want to move to the countryside. Furthermore, home working has led people to look for more space in their property and access to an outside space such as a garden.
“One of the biggest trends to have emerged over the past 12 months has involved people looking to move for more space, with an extra bedroom or a bigger garden, and this trend has continued into 2021. It’s a competitive market for three-bed and four-bed detached houses right now, with around 30% fewer new listings coming on the market for these homes than this time last year.” Tim Bannister, Rightmove.
Strong performance in the property market
During the Brexit negotiations, the housing market stagnated due to the uncertainty in the economic and financial climate. However, once the Brexit deal was signed the property market picked up.
The pandemic and national lockdown that followed the Brexit deal didn’t hinder the resurgent property market. In May 2020, the Bank of England house price forecast predicted a 16% drop, yet prices increased and the market performed considerably well. Amidst the initial lockdown, nobody anticipated that property prices would reach record highs.
In March the number of properties sold hit a record high as everyone tried to complete their deals before the stamp duty holiday ended. According to HMRC, approximately 180,690 transactions were made in March, double the number that was completed in March 2020 and the highest number since 2005.
The actions taken by the government to resuscitate the economy have all aided the property market. Demand has shot up since the introduction of the Spring Budget that was announced on the 3rd of March by Chancellor Rishi Sunak. In the Spring Budget, the government introduced direct support for the housing market by extending the stamp duty holiday and launching a new mortgage guarantee scheme. The Spring budget alongside record low-interest rates and help to buy schemes for first-time buyers will keep demand high for the rest of the year and increase the purchasing power. Both Savills and Knight Frank have predicted that UK average house prices will increase 4 and 5% by Christmas.
Is it a good time to buy a house?
If you would benefit from the stamp duty holiday, then now is a great time to buy a house. Stamp duty holiday has been extended till June 30th, however, there are still some savings to be made before October. For any completions before June the 30th, you will pay no Stamp duty if your property is under £500,000. Thereafter, from July to September, it drops to £250,000 before returning to the normal threshold of £125,000.
Nevertheless, it is important to consider that there could be a knock–on effect at the end of the stamp duty holiday as prices might drop since demand should decrease.
Evaluating the property market is a great place to start when thinking about buying a property. The UK house price index is a great source as it uses data from HM land registry, Registers of Scotland, and Land and Property Services Northern Ireland calculated by the Office of National Statistics revealing the performance of the housing market over the last 12 months.
The 5% deposit home loan guarantee scheme, available to first-time buyers and homeowners could be seen as very appealing since mortgage lenders could offer high-loan to value lending. Banks including HSBC, Barclays, Lloyds, Santander, and Natwest have registered for the scheme.
In addition, the government has introduced recovery loans and mortgage payment guarantees for the banks and lenders, enabling banks and lenders to have security against their underwritten loans. According to The Times, Spring is usually the best time to buy a house as more properties come to the market. Buyers and Sellers are eager to complete before the summer holidays.
All these measures taken during the pandemic have increased the purchasing power, easier accessibility to finance for investors, and consequently made the housing market boom to record levels. Nonetheless, the truth is that the best time to buy a house will depend on your circumstances, driven by your personal desires rather than the market conditions.
Cornerstone have extensive property search experience within the UK; and our expertise can provide you with an unrivalled service, ensuring we find the right property for you and your investment.
Through our technology – an interactive platform – you will have one centralised and efficient space where you can communicate with us in real-time – removing long email chains – and where you can follow and give feedback as we manage the entire process from start-to-finish for you!
Our property buying and investing services encompass the following areas:
- We ask you to complete a brief based on your aims and objectives.
- We will discuss current market conditions, and advise upon budgets and areas that match with your lifestyle and requirements.
- We conduct a thorough property search, ensuring it is as productive and efficient as possible, scouring the market for the most suitable properties.
- We are also able to source ‘off-market’ properties due to our long-standing relationships with estate agents.
- We start with a comprehensive first search day, where we view a large number of properties so you can assess the area and further narrow your criteria.
Comprehensive Reporting and Market Update
- We will be in constant contact with you, via our platform alerting you to any suitable new properties, and giving you an overview of work undertaken by ourselves or any other professionals involved.
- We will keep you continually briefed throughout the negotiation, and once a property is agreed we will provide a property report which will include comparable sales figures and evaluation of market data etc.
Negotiating & Conveyancing
- We will oversee all further research and negotiations, using our considerable experience to negotiate the best possible price and most favourable terms for you.
- Once terms have been agreed, we will oversee the legal process, ensuring that the purchase can complete as quickly and effectively as possible.