What’s going on in the UK Property Market?
Here’s what our experts have to say…
What’s going on in the UK Property Market?
Here’s what our experts have to say…
The Stamp Duty holiday until the end of March 2021 provides welcome relief and has extensive benefits for the UK economy.
The property market requires a strong performing lower end where the majority of transactions take place – these are the legs that support the market as a whole.
The fact that the Stamp Duty holiday has been introduced with immediate effect is excellent news and will prevent a stop/start disadvantage to the market.
The expectation was that it would stay in place until January – its extension to March is great news and prevents a scramble to get transactions over the line. By March ’21 we would expect to see the market settled and ready to operate at more normal levels into the spring and summer of next year.
One of the problems in the housing market is a reluctance amongst the older generation to leave the houses that have become too large for them. This will encourage downsizers, and free up the market at the middle and upper end of the market where there is a surplus of demand.
It feels a bit like Christmas has come early, (and avoids the scramble over Christmas itself that some of us were worried about.)
If you are thinking of buying, our advice would be to get on with it – with serious intent.
James Greenwood of Stacks Property Search says, “We welcome the steps the Chancellor has taken to improve the housing infrastructure and address the terrible homeless situation. But we would have liked to see more on housing in the Budget to help free up underused property, the wasted capacity that is one of the underlying problems of the UK property market that Governments consistently fail to address.
“We’re very pleased he hasn’t messed around with Stamp Duty; what UK buyers and sellers need is certainty. The 2% on non-resident buyers is generally digestible, it’s likely to impact London, but look at the land and property taxes that non-residents pay in other countries, and UK tax is relatively benign. We don’t believe it will have a detrimental effect on the market generally. The UK remains, for many reasons, an excellent and secure place to invest.
“Improved investment in infrastructure is likely to create property hotspots as people are attracted by improved journey times and connectivity. But be aware that the benefits of these improvements are unlikely to be evident in the short term.
“Ideas for development of the Government’s housing policy include:
“Make Help to Buy available on resale property as well as new build. Currently the system is more ‘help to sell’ than help to buy, and generally lines developers’ pockets, frequently leaving first time buyers, who have paid a new premium, in trouble when it comes to resale.
“Scrap CGT for Buy to Let property owners who sell to first time buyers. The current legislation means that many private landlords can’t afford to sell; scrapping CGT would free up the market at the bottom end.”
Confidence returns to the property market
The property market, that has been log-jammed for so long, is slowly beginning to open up.
We do expect to see activity levels rise this year, although there still remains a severe shortage of stock in parts of the market. London is busy, the Home Counties are busy, but many continue to sit on their hands.
Less economic and political uncertainty, combined with a continuation of low interest rates, give those who have been worried about what is potentially around the corner, a clear window to sell and buy a new home.
Without doubt, there is a huge amount of pent up demand from homeowners who have been delaying a move, whether that’s upsizing, downsizing, or moving geographically.
Vendors shouldn’t expect prices to rise, although some property that have been languishing on the market at a slightly inflated price may are starting to attract more attention. Selling agents need to manage the expectations of vendors who will want their wait to be justified with higher prices.
Our advice to buyers is to get active, put their own property on the market, and start looking (not just browsing the internet). Arrange finance as soon as possible, it takes longer these days than in the past, and buyers who have their finance in place will be given priority in competitive situations.
You are operating in a more confident market, and that is generally good for everybody.
Some of the questions we are being asked – and answers we are giving:
Is now a good time to buy, or should I wait to see what happens….?
Now is an excellent time to buy, but you’ll have to look very hard and be very determined as there is a severe shortage of property on the market.
But it’s a great time for decisive buyers, especially if we can negotiate you a good deal. Some vendors are determined to make a sale before Brexit happens, some need to make sales and some want to make sales.
What about Stamp Duty? Can I expect any changes?
Current levels of Stamp Duty are, in our opinion, here to stay, so don’t hold your breath waiting for any improvements!
Is this a good time to sell?
There’s a shortage of stock in many sectors of the market, as many potential vendors are hanging on to see what happens next.
But life can’t be put on hold for many, so if you need to move house, our advice would be to start the process. If you have a good property without any blight, you should find a good supply of potential buyers. Talk to a good local estate agent.
Is now a good time to buy a holiday home?
The number of UK residents taking holidays at home is rising steadily – factors such as very weak Sterling, better summers, and uncertainty about the changing face of European travel are all relevant. So a good investment in a holiday location at a time when prices are stable could turn out to be an excellent decision.
What about returning expats?
Sterling is cheap, so if you’re paid in Dollars, UK property looks very attractive. Jump in!
What will the effect of a ‘hard’ or ‘soft’ Brexit be on the market?
We don’t believe it will make much difference at all!
All that is needed is forward movement, and the market will become more active.
Demand is strong, and will continue to meet supply, so prices remain stable.
Is this a good time to be a buy-to-let investor?
Yes, hunt for bargains, especially in the new-build sector which, unlike the rest of the market, is oversupplied and bargains are available.
We expect rents to continue to rise.
For BOTH buyers and sellers, there will be opportunities out here.
Across the country, there’s huge unsatisfied demand.
We reckon that there are over six million households living in the wrong property, many because they are anxious about moving home in these politically and economically uncertain times.
There are any number of reasons that many home-owners will continue to do nothing and stay put.
But the smart money will be on those buyers and sellers who see a stable market, despite uncertainty, with good opportunities for negotiation.
The market will continue to be thin, with a lack of stock in parts.
One thing is for sure – prices are going nowhere, having dropped in London and the SE, and remaining stagnant in the West and the Midlands.
Buyers at the upper-middle/top end of the market are now accepting the ‘new normal’ Stamp Duty rates – and vendors are going to have to continue to adjust their prices accordingly. This will make a big difference to the upper-middle end of the Country market, and we are already seeing signs of movement and increased transactions.
Historically the property market stagnates temporarily as we wait for general elections, Budgets, and other major political events. But since the Hung Parliament of 2010 we have been in a permanent state of political flux, and there is no end in sight, with no real resolution to the Brexit issue for possibly several years.
Of course, it’s not these events in themselves that stop people buying and selling; it’s the fear of the unknown, which might affect finances, jobs and property prices.
Fear makes us more tentative.
For those who, have a real need and/or real desire to buy, or sell and buy, our best advice is to accept that abnormal is the new normal and start the process.
The alternative is to go on putting your life on hold for years.
The market will be relatively stable, and there will plenty of opportunity for good negotiation.
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When making probably the most important financial decision of your life, it pays to have the right advisors at your side.
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