Earlier in the lockdown, experts predicted an uplift in the market would come, but it seems to have surpassed most expectations with many professionals in the market giving surprisingly positive analysis. It seems that now is definitely a good time to put your property up for sale.
What the professionals say
The latest figures from the Royal Institute of Chartered Surveyors (RICS) show strong growth in the housing market in August, for the third month in a row, with sales, enquiries and new instructions all increasing, and predicted positive growth for near-term sales. Its August UK Residential Survey shows that house prices increased in almost all parts of the UK and 63% of respondents to the survey said that interest in their properties had increased in August.
With agreed sales of £37 billion, online estate agent, Rightmove, achieved the highest sales in August 2020 since it began recording figures 10 years ago – 38% higher than the previous year and 20% higher than the previous record in March 2017. Rightmove also reports that more sellers found a buyer within one week of putting their property up for sale than at any time during the last ten years with a huge increase of 125% compared with the same period last year and a 28% increase on the previous recorded high in February 2016. Its figures show that of 200,000 properties sold between 8 July 2020 and 31 August 2020, one in seven homes sold within a week, compared with one in ten last year and 30% of properties sold within two weeks compared with 21% in 2019.
Mortgage lender, Nationwide confirms that house prices increased in August – in which it saw the highest monthly rise for more than 16 years. It says that annual house price growth rose to 3.7% in August, with prices up 2% month on month (taking seasonal factors into account). This was the highest growth since February 2004 which saw an increase of 2.7%
What has prompted the boost in sales?
There are many issues, not least the pent-up demand created during lockdown. Of course, there are those who were looking for property before the lockdown came into force – and so they are still looking, added to those who have decided to move since.
The pandemic itself has led to changing attitudes, changing priorities and changing work patterns.
More people are working from home, and many will stay that way, so people are looking for more space in which they can set up their home office. Some now don’t need to live so close to their place of employment, so are happy to looker further afield – where they might be able to get more for their money.
It has become evident that as more people recognise the wellbeing benefits of outside space and green areas, properties with gardens or land, or those close to parks or outdoor facilities have become more popular and prices have risen.
There are also reports of houses close to Ofsted’s “excellent” rated schools increasing in price as parents look to prioritise their children’s education. One report says that parents now face a premium of over £195,000 in certain areas close to these top-rated schools, compared with a previous premium of £180,000 in 2019.
Has the stamp duty holiday contributed?
Undoubtedly! The chancellor’s announcement in July that a stamp duty holiday is available until 31 March 2021 has certainly stimulated the market, with people scrambling to take advantage of the saving on properties up to the value of £500,000. Second-home buyers and those buying properties to let are also looking to avail themselves of the saving as they will now only have to pay 3% stamp duty on properties up to £500,000 rather than up to 8%.
However, as Graysons has found, house sales are up across the board, not just in the stamp duty holiday bracket, and the sale of larger, more expensive homes is also on the increase.
Should I sell now?
The statistics suggest so and the growing number of people instructing Graysons on property matters backs that up. Caroline Murray, partner and head of the property team says:
“We are working flat out to deal with the pent-up demand that resulted from the lockdown and we are delighted to say that instructions for sales are increasing all the time. We work with many estate agents in the region and they are all saying the same – people are keen to move, prices are increasing and competition is fierce.”
If you want to meet the growing demand, especially from those hoping to benefit from the stamp duty holiday – you should take action now. Six months might seem a long time, but there is lots to do when buying and selling property. The process usually takes around 8 to 12 weeks but larger, more complex sales or those where there is a long chain can take more time. Purchases need to be completed before 31 March 2021 to take advantage of the stamp duty saving scheme – it is definitely time to act now.
Contact our property experts for help and advice.
Author: Caroline Murray, partner and head of Graysons’ property team.