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Housing market experiences busier than usual December

A major estate agency experienced a busy December, despite activity dropping off from November.

NAEA Propertymark found there were eight sales per branch in December, the highest since 2006.

Meanwhile there were an average of 348 prospective buyers per branch, the most since December 2016.

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NAEA PropertyWire attributed the busy December to the stamp duty holiday.

Despite the market being stronger than normal, the number of buyers registered per branch actually fell by 41% from 580 in November.

Meanwhile the number of sales agreed fell from 13 in November.

Mark Hayward, chief policy advisor, Propertymark, said: “The number of potential buyers in the market fell significantly in December after Novembers’ record high.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“While we would ordinarily expect to see a lull over the festive period, these numbers show that the tightening of lockdown restrictions, coupled with the reality that many individuals would no longer meet the stamp duty deadline, has exacerbated this.

“As we approach the stamp duty, LTT and LBTT cliff edges on the 31 March, we are increasingly concerned about the pressure this is placing on the property industry with more than two-thirds (69%) of estate agents expecting to see an increase in failed sales due to buyers realising their sales will not complete ahead of the deadline. It’s important that action is taken now to prevent this and support the property sector.”

BY RYAN BEMBRIDGE

Source: Property Wire

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ONS: Average UK house prices reach record high

Average UK house prices rose by 7.6% in the year to November to reach a record high of £250,000, according to the ONS House Price Index.

The data shows that this increase is the highest annual growth rate the UK has seen since June 2016.

In addition, this is up from the year to October, which noted a 5.9% rise.

Average house prices increased over the year in England to £267,000 (7.6%), Wales to £180,000 (7.0%), Scotland to £166,000 (8.6%) and Northern Ireland to £143,000 (2.4%).

The average house price in London surpassed £500,000 for the first time in November 2020.

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Furthermore, the North East is the final English region to surpass its pre-economic downturn average house price peak of July 2007, to now stand at £140,000.

Kevin Roberts, director of Legal & General Mortgage Club, said: “The latest ONS house price index figures will be welcomed by existing homeowners.

“The resilience of the housing market continues to shine through as people remain encouraged to move house with or without the benefit from the stamp duty relief, no doubt also encouraged by the rollout of the a COVID-19 vaccine.

“There remain challenges, however, and the government’s decision to extend the furlough scheme until the end of March, will be welcomed by many homeowners exploring their options.

“At Legal & General Mortgage Club, we saw searches for furlough friendly mortgages increase by 230% in November 2020, when compared to the previous month.”

“Buyers wanting to access the best and most suitable mortgage products should absolutely consider speaking with an independent mortgage adviser, particularly as we draw closer to the government’s stamp duty holiday deadline, which is creating very high demand.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Paul Stockwell, chief commercial officer of Gatehouse Bank, added: “House prices defied expectations by increasing throughout 2020 and leading to a record high in November, with the stamp duty discount driving strong demand from buyers — but there are signs from other indices that price growth has now begun to slow.

“The UK housing market is still open for business during this lockdown, but demand is likely to have started to taper off as buyers begin to concede they will not be able to complete a transaction in time to make the stamp duty deadline.

“The March 31 cut-off is looming, and although professionals across the industry are working in earnest to get applications over the line in time, fears are mounting about how many agreements could fall through.

“With property portal Rightmove predicting as many as 100,000 buyers could face an unwelcome tax bill when their sale fails to complete on time, all eyes are turning to Chancellor Rishi Sunak and whether he may extend or add a taper mechanism to the scheme or risk deals falling apart.”

Guy Gittins, managing director of Chestertons, said: “The second lockdown no doubt encouraged some people to put their property search on hold, but we didn’t notice a big difference and activity levels were still a lot higher than we anticipated for this time of year.

“Part of this was driven by the incentive of the stamp duty saving, but we believe the main driver was that people just wanted to move as quickly as possible while conditions were favourable.”

By Jake Carter

Source: Mortgage Introducer

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London property prices hold up for investors

London flat and maisonettes have risen by 9.0% on last year to £442,304, according to Herddle analysis of government data.

The average price of all types of London properties has risen by 9.7% over the last despite the pandemic and the economic impact of Brexit.

This compares to inflation of just 0.8%.

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Corey Cumins, chief executive of Herddle, said: “Investors and landlords who held their nerve AND held onto their flats have been rewarded with some remarkable performance. Prices of flats and maisonettes have risen by 9.0% and that’s way ahead of inflation.

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“Looking ahead, it’s reasonable to expect more economic volatility – as both Brexit and new strains of COVID bite into companies, wages and jobs.

“We could see some house price volatility but that’s never a reason to sell assets – and we expect to see investors and landlords continue holding their nerve.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Scottish home sales record 119% rebound

The volume of Scottish home sales surged at the end of 2020, analysis of ONS data from property firm Apropos by DJ Alexander has found.

Between September and November there were 35,610 property transactions, up from 16,220 between June and August.

The 119% increase was much greater than the volume of transactions across the rest of the UK. The UK figure was 48% up; in England it rose 44%; in Wales it increased 66%; while in Northern Ireland it was up 77%.

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David Alexander, joint chief executive officer of apropos by DJ Alexander, said: “These figures highlight just how successful the stamp duty holiday has been across the whole of the UK with each nation recording substantial increases in the volume of sales coupled with rising prices.”

“However, it is clear that Scotland has been enjoying a greater boom in house sales than the rest of the UK with more than double the volume in the latest three months compared with the previous three-month period.

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“Given that the relaxation of the threshold for land and buildings transaction tax (LBTT) in July is clearly the source of this housing boom it would seem questionable to let this suddenly end on the 31st March.”

Alexander added: “With the Scottish budget happening next week it would be the ideal opportunity for the Scottish Government to signal its intent on preserving the growth in the property market by announcing a continuation of the stamp duty holiday beyond March to ensure there is no sudden decline in activity.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Stamp duty holiday extension to be debated in parliament

The government will be forced to debate the stamp duty holiday, after more than 115,000 people signed a petition calling for an extension.

Rightmove has estimated that, as it stands, more than 100,000 people will miss out on the stamp duty holiday, seeing as the market is movingly more slowly than usual.

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The stamp duty holiday means that people don’t have to pay stamp duty on the first £500,000 of a property purchase, saving up to £15,000.

Any petition signed by more than 100,000 is obliged to be debated in parliament.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

The government has previous said that it has no plans to extend the holiday.

It responded on the 10th December: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The government does not plan to extend this temporary relief.”

BY RYAN BEMBRIDGE

Source: Property Wire

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London’s Islington leads the way on house price growth

Prices in London’s Islington surged by 13.4% to £727,922 in 2020, making it fastest growing area in the UK, Thirlmere Deacon analysis of Halifax data has found.

A number of other areas in Greater London also recorded strong rises, like Croydon (10.9% to £397,538), Hounslow (9.1% to £523,659) and Romford (7.6% to £391,000).

Outside London the biggest mover was Leeds, which had the country’s second-fastest rise, a whopping 11.3% to an average price of £247,116.

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Stuart Williams, founder and chief executive of Thirlmere Deacon, said: “Over the past 24 months, the UK property market has endured changing economic and political climates and remains to be incredibly resilient.

2019 brought political uncertainty and Brexit lingered over the UK, after the decisive election result in December 2019 the property market began 2020, with relative optimism and the ‘Boris Bounce’ triggered activity.

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“As the pandemic took hold and the UK entered lockdown, the property market was effectively put on pause though a limited number of transactions completed and off plan purchases were agreed during this time.

“Upon reopening in mid-May the UK property market saw pent up demand unleashed which has driven price growth upwards – every region in the country recorded an increase in house prices in 2020.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House prices have doubled over the past decade

Average house prices have increased by 51% over the past 10 years, according to e.surv’s Chartered Surveyors House Price Index.

On a monthly basis, house prices across England and Wales increased by 1.4% between November and December 2020.

Throughout 2020, house prices rose by 7.8% despite the added complications of COVID-19.

This is the highest annual increase since 2016, however the majority of growth took place in the last six months of the year as pent-up demand was released by more relaxed coronavirus restrictions.

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As a result, the average house price in England and Wales was £326,762 at the end of December.

Richard Sexton, director at e.surv, said: “During 2020, large numbers of people across the UK were confined to their houses for long periods of time, as we battled the pandemic.

“Over the year many people were forced to adapt their homes to function as offices, schools and nurseries.

“This increased emphasis on where we live and where we spend so much of our lives undoubtedly helped focus many people’s minds on the property market.

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“This increased focus was reflected in the types of property that were most sought after in 2020.

“Larger, typically more expensive, properties with more outdoor space became even more highly prized, which in turn increased the price of the average transaction.

“It’s important to remember that the pandemic which produced such an unusual year is very much still with us.

“Everyone involved in the property market must continue to operate in a responsible manner, making use of technology where possible to support the industry while putting safety first.”

By Jake Carter

Source: Mortgage Introducer

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Mortgage lenders back possessions moratorium

Mortgage lenders have backed the Financial Conduct Authority’s extension to the moratorium on possessions to 1 April 2021.

This followed the government’s extension of the moratorium on private tenant evictions until 21 February 2021 in England. Wales and Scotland have banned rental evictions until 31 March 2021.

Eric Leenders, managing director of personal finance at UK Finance, said: “The banking and finance industry is committed to providing ongoing support to those facing financial difficulty as a result of the pandemic.

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“The industry is fully supportive of a moratorium on possessions remaining in place until 1 April 2021 to ensure customers do not lose their home at this difficult time.

“This is part of a package of support provided by lenders for those who need it, including payment deferrals and tailored assistance.

“It is vital that customers who are concerned about their finances go online or contact their lender to understand what options and support are available to them.”

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Under the extension, members of UK Finance and the Building Societies Association will agree not to seek, or enforce, a warrant for possession before 1 April 2021, unless there are exceptional circumstances such as a customer requesting proceedings to continue or when the property is in vacant measures.

This latest extension means the measures will have been in effect for 12 months by its end date.

BY RYAN BEMBRIDGE

Source: Property Wire

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What will the property sector look like in 2021?

After the property sector was forced to halt everything during the first lockdown, the second half of the year saw demand for online conveyancing services bounce back dramatically.

We expect this surge to continue throughout Q1, due to a number of reasons.

For starters, the huge back up of prospective buyers and sellers after the spring 2020 market cut-off should keep demand going through early 2021.

Buyers have now had months more to save up a viable house deposit, and both sellers and buyers will want to get the ball rolling.

What’s more, low interest rates, resulting in cheaper mortgages for some, are spurring things on.

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Couple this with the stamp duty holiday continuing up until 31 March 2021, demand is still soaring.

After these incentives diminish come Q3 and 4, we forecast a plateau later in the year.

House Prices to Increase

Many believe that the end of the stamp duty holiday, combined with the end of the Furlough Scheme on 31 March 2021, will cause house prices to decrease.

That said, some think the increase in prices will continue into early 2021, and decrease come 2022. They believe that the peak in pricing will coincide with the usual spring boom in house sales, and continued growth will simply be subdued.

We are more inclined to agree with the latter. Low interest rates, as well as cheaper mortgages available for some people, will prop everything up until Q3 and 4.

Then, after this initial demand, and the stabilisation of the market post-COVID, we can see a decrease potentially following suit from 2022 onwards.

Continued Struggles for First-Time Buyers

Statistics show that home movers are set to overtake first-time buyers with home purchases once again. As the year moves to 2021, we can only predict that these struggles will continue for a number of reasons.

Firstly, continually rising house prices, as well as sky rocketing rent, low wages, and unemployment, makes it near impossible for first-time buyers to save a deposit.

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What’s more, despite low interest rates, a withdrawal of high loan-to-value mortgage products disproportionately affected first-timers, who typically require bigger mortgages to cover the lack of a hefty deposit.

We can expect this struggle to continue if the picture isn’t changed.

What’s more, new equity loan scheme, which is aimed at supporting first-time buyers with new-build purchases, may not have the intended effect.

It certainly seems like a great opportunity, but the country is still lacking affordable housing for many, so we doubt it’ll help.

Then, we have the stamp duty holiday, which has only really benefitted those already on the ladder, further increasing the disparity between first-time buyers and others.

Finally, young people have been affected most dramatically by unemployment this year, further compounding the issue.

What Are Your Predictions for the 2021 Property Market?

Evidently, there’s no clear picture of how the property market will look in 2021. It all depends on how the government deals with the pandemic in the new year, as well as the success of the vaccine.

It’ll also depend on how quickly unemployment rates get back on track.

By Daniel Chard

Source: Mortgage Introducer

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UK house prices end 2020 on record high but growth slows

UK house prices ended 2020 on a record high, but the pace of growth slowed towards the end of the year, the latest figures showed.

House prices in the UK were 0.2 per cent higher in December than the previous month, reaching an average value of £253,374.

On an annual basis, property prices jumped six per cent compared to December the previous year due to the release of pent-up demand following the first Covid-19 lockdown in March, according to analysis by Halifax.

The rate of growth recorded last month slowed from the one per cent rise reported in November.

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Analysts warned that the end of Help to Buy and the stamp duty holiday, combined with escalating unemployment, could have a downward impact on prices this year.

Russell Galley, managing director at Halifax, said 2020 had been a “tale of two distinct halves for the housing market.”

“Following a strong start, the first half was dominated by the restrictions on movement due to Covid-19, and prices were subsequently down 0.5 per cent at mid-year as the market effectively ground to a halt,” Galley said.

“However, when the market reopened, prices soared as a result of pent-up demand, a desire amongst buyers for greater space and the time-limited incentive of the stamp duty holiday.”

He added: “With the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021.”

Howard Archer, chief economic adviser to the EY Item Club, predicted that UK house prices could be five per cent below current levels by the end of the year.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“The EY Item Club suspects elevated housing market activity and robust prices will prove unsustainable sooner rather than later – although, in the immediate future, activity may still benefit from buyers keen to take advantage of the Stamp Duty threshold increase before it ends,” he said.

“There is always the possibility that the chancellor could extend the threshold increase in the March Budget.”

He added that the housing market is “likely to come under mounting near-term pressure as the economy continues to be affected by restrictions in most areas”.

“There is also likely to be a fading of the pent-up demand effect on housing market activity,” he said.

By Jessica Clark

Source: City AM

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