October 2020 Market Update
To say estate agents are busy would be an understatement. The unprecedented uplift in buyer demand over the past three months certainly bucks any notion of pandemic paralysis. Rightmove tells us that buyer enquiries are up 14% annually and sales agreed are just 5% below this time last year – which is pretty remarkable under the circumstances. Considering the market was stagnant for most of 2019, the last quarter’s 8.5% increase in buyer demand is extraordinary and has contributed to an annual 5% uplift in house prices. This will be a relief for any homeowners who were wondering if last year’s house price plateau was here to stay. Bizarrely, Covid-19, along with some government intervention has certainly overcome that, at least for the time being, because when activity rises, house prices follow.
Nevertheless, research from PwC suggests that up to 20% of people say they are now less likely to purchase a home over the next couple of years compared to pre-Covid-19 figures, due to the ongoing pandemic and economic uncertainty. This is partially balanced by the 10% of people who say they are now MORE likely to move than before, possibly due to the stamp duty holiday worth up to £15,000.
Don’t forget that maximum £15,000 SDLT saving is on a £500,000 property – the average saving is about £4,500 but only until March next year when the concession is due to expire. So if you’re thinking of moving next year – do bring it forward!
Interestingly first time buyer sales agreed are up 36%. Additionally, the good news for first time buyers is that the government is planning to help young people become “Generation Buy” by helping them onto the property ladder with just a 5% deposit. It’s essential not only to power the property market from below, but it’s also good for society to make home ownership available to all. Having said that, government intervention in the economics of supply and demand usually ends in tears.
Although buyers are certainly buying, a potential difficulty is the length of time it is taking for local authority official searches to come back due to Covid-19 related staffing issues. Some are taking up to two months, which could really frustrate buyers hoping to take advantage of the stamp duty holiday. So a key word of advice here is that if you are a seller – order the searches yourself – even before a buyer is found – it could just save you your sale! Please feel free to speak to any of our agents about how to go about this.
On the investment side, landlords will be pleased to hear that, according to ARLA, the number of new prospective tenants registering, is the highest on record with over 100 applicants per branch, breaking the last record set in 1997! Average tenancy duration is also at an all-time high, with tenants staying in their properties for an average 21 months.