The property market continues to weather the storm

09th October 2020

By Anna Bibby

According to NAEA Propertymark’s housing report for August, thirteen percent of properties sold in August had sold for more than the original asking price. It also demonstrated an increase from what was already a strong summer, with June and July seeing 10% and 8% of properties selling above their asking price, respectively.

Mark Hayward, Chief Executive, NAEA Propertymark said: “It’s interesting to see that one in eight properties sold for more than the asking price in August this year.

“Last month, we witnessed a boom in the number of prospective buyers following the government’s announcement of a stamp duty holiday, and it seems this is increasing the level of competition in the property market.”

So, what is causing this sudden spike in interest in the property market? The most obvious factor will be the Stamp Duty holiday that was introduced by the government in July to help boost activity in the market. The new measures are temporarily in place until March 2021 and it will mean that nine out of ten homebuyers will save an average of £4,500 in Stamp Duty. It has certainly done the trick with the number of house sales rising by 14.5% in July and then a further 15.6% in August, according to government data.

The stamp duty holiday has also benefitted the wider economy as well as the property market. According to government data, the move has managed to protect around 750,000 jobs within the supply chain and has also encouraged homebuyers to go out and buy DIY products and durable goods such as furniture and appliances. It has also given buyers more money to play with to secure their ideal property with a higher offer.

Cheaper borrowing rates have also encouraged buyers to add to their portfolio. Data from the Bank of England has found that the number of mortgage approval rates has seen its sharpest monthly rise since 2007, with figures increasing from 66,300 applications accepted in July to 84,700 in August.

The spike in interest from buyers has also had a positive impact on house prices. In their latest report, Savills raised its house price growth forecasts to 4% and in their revised five-year outlook, it predicted a 20.4% house price growth by the end of 2024, up from the 15.1% increase that was predicted back in June. Nationwide shared a similar sentiment in their house price index, where they recorded the biggest increase in house prices in August for 16 years. In their data, the average price for a residential property increased by two percent to £224,123.

“The pace of change in the U.K. housing market has taken us all by surprise over the past few months suggesting normal rules simply don’t apply,” said Lucian Cook, Savills head of residential research.

“While we clearly can’t ignore the economic backdrop, other factors, including a stamp duty holiday, have unleashed an unexpected wave of activity in the market and added to the pent-up demand coming out of lockdown”

The UK property market’s reaction to the current recession is not one we usually see in this situation and it’s clear that the lockdown has given people an appetite for either relocating or expanding their property portfolio.

Are you looking to invest in buy-to-let? Get in touch with us today!

Did you find this article helpful?

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The property market continues to weather the storm

09 October 2020

According to NAEA Propertymark’s housing report for August, thirteen percent of properties sold in August had sold for more than the original asking price. It also demonstrated an increase from what was already a strong summer, with June and July seeing 10% and 8% of properties selling above their asking price, respectively.

Mark Hayward, Chief Executive, NAEA Propertymark said: “It’s interesting to see that one in eight properties sold for more than the asking price in August this year.

“Last month, we witnessed a boom in the number of prospective buyers following the government’s announcement of a stamp duty holiday, and it seems this is increasing the level of competition in the property market.”

So, what is causing this sudden spike in interest in the property market? The most obvious factor will be the Stamp Duty holiday that was introduced by the government in July to help boost activity in the market. The new measures are temporarily in place until March 2021 and it will mean that nine out of ten homebuyers will save an average of £4,500 in Stamp Duty. It has certainly done the trick with the number of house sales rising by 14.5% in July and then a further 15.6% in August, according to government data.

The stamp duty holiday has also benefitted the wider economy as well as the property market. According to government data, the move has managed to protect around 750,000 jobs within the supply chain and has also encouraged homebuyers to go out and buy DIY products and durable goods such as furniture and appliances. It has also given buyers more money to play with to secure their ideal property with a higher offer.

Cheaper borrowing rates have also encouraged buyers to add to their portfolio. Data from the Bank of England has found that the number of mortgage approval rates has seen its sharpest monthly rise since 2007, with figures increasing from 66,300 applications accepted in July to 84,700 in August.

The spike in interest from buyers has also had a positive impact on house prices. In their latest report, Savills raised its house price growth forecasts to 4% and in their revised five-year outlook, it predicted a 20.4% house price growth by the end of 2024, up from the 15.1% increase that was predicted back in June. Nationwide shared a similar sentiment in their house price index, where they recorded the biggest increase in house prices in August for 16 years. In their data, the average price for a residential property increased by two percent to £224,123.

“The pace of change in the U.K. housing market has taken us all by surprise over the past few months suggesting normal rules simply don’t apply,” said Lucian Cook, Savills head of residential research.

“While we clearly can’t ignore the economic backdrop, other factors, including a stamp duty holiday, have unleashed an unexpected wave of activity in the market and added to the pent-up demand coming out of lockdown”

The UK property market’s reaction to the current recession is not one we usually see in this situation and it’s clear that the lockdown has given people an appetite for either relocating or expanding their property portfolio.

Are you looking to invest in buy-to-let? Get in touch with us today!

Anna Bibby

Did you find this article helpful?


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