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The housing market has been in a significant boom since Chancellor Rishi Sunak announced the ‘Stamp Duty Holiday’ in July last year, but like all holidays, it will soon end. The holiday witnessed a dramatic increase in the housing market with HM Revenue and Customs figures showing that residential transactions were 31.5% higher in Dec 2020 compared to the same period in 2019. There are many opinions and forecasts in the press on how the market will perform once the holiday ends on March 31st, but with conflicting industry opinions, what will really happen and is now the right time to sell? Here we summarise some of the predictions and help you navigate the choppy waters ahead.
Who is predicting what?Rightmove report the average price of property coming to market has fallen by 0.9% (that's an average of -£2,887) in Jan 2021 when compared to Dec 2020 prices. Does this monthly drop in prices indicate how the market may perform in 2021 and potentially mark the end of the mini-boom experienced by the Stamp Duty Holiday announcement? Rightmove say the 2021 outlook is 'somewhat muddied by the challenges of the pandemic and by the 31st March stamp duty holiday deadline’. However, visits to the Rightmove site have continued to increase since the start of January and up 33% on the same period in Jan 2020. Nationwide Building Society reported a six year high in house prices at the end of 2020, but predict that the housing market will slow down ‘sharply’ in the coming months due to the effect of the weakening labour market and ‘especially once the stamp duty holiday expires at the end of March’. Halifax reported only a 0.2% increase in house prices from November to December 2020 and predict that although house prices were at an all-time high in December, house prices may feel a ‘downward pressure’ as we move through 2021. Royal Chartered Institute of Surveyors (RICS). Although the housing market remains open at present, RICS are predicting sales levels will drop around 6% across the year, but are anticipating that the rollout of the Covid vaccine may gradually ‘improve the market’. Savills predicating market stability but expect a ‘lull’ in activity over the forthcoming months. However, they anticipate that market conditions will ‘pick back up in 2022’. Zoopla are projecting house prices are ‘set to be weaker in 2021’. Values are projected to grow by just 1% by the end of 2021 – compared to growth of 4% in 2020. What now? With Rightmove reporting over 613,000 sales agreed in the property pipeline at present, it is estimated that 100,000 could miss out on the £15,000 potential savings the SDLT holiday can provide by March 31st. Backlogs of mortgage approvals, legal and conveyancing hold-ups, and with working from home and home-schooling commitments also attributing to delays, it is making the property market less predictable and more volatile. With the lockdown restrictions showing no sign of easing at present and home-owners personal circumstances ever changing with the impact of the pandemic, those needing to move are still trying to find a way to ‘squeeze in’ a last minute sale to grab the holiday savings. But, with Rightmove stating that the average sale is currently taking 126 days from the time an offer is accepted until legal completion, many homeowners are facing disappointment and may miss out on the savings. How can I move before the March 31st deadline? If you want to move and want to beat the stamp duty race, Spring can help and complete in as little as seven days, freeing you to make your next move before the March 31st deadline. Our dedicated property advisors are on hand to help you make the right decision for your next home sale. Get in touch.
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