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Average Price of Property Coming to Market Jumps 2.1%

The national average price of property coming to market has hit a new all-time high of £327,797, following a 2.1%, or +£6,733, monthly increase.145,000 properties were newly marketed this month, with the number of sales agreed up by 55% on the same period two years ago, reducing the stock of properties that are available to buy to the lowest proportion ever recorded

Barrows and Forrester managing director James Forrester, said: “A record-breaking month on many fronts with asking prices increasing at an incredible rate, as a heightened level of demand pushes property values ever higher. This price growth is also being driven by a lack of available stock, particularly second stepper suitable two and three-bed homes. In fact, you’d have an easier time finding a straight-talking politician than you would a decent three up, three down in current market conditions.”

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Benhham and Reeves director of Marc von Grundherr, said: “The top end of the market is driving current performance with the strongest rates of house price growth and, unlike the regular market, this train is unlikely to come off the tracks when the stamp duty holiday expires. While a considerable cash saving in stamp duty tax is nice, it’s not the driving force behind prime property purchases and so we’re not seeing the mad scramble to complete that is causing havoc in lower price tiers. It’s very much a case of the hare and the tortoise in this respect and while the general market is sure to run low on steam come the end of the year, the high-end market is likely to keep moving forward at a strong and consistent pace. We’re seeing this in London more than anywhere at present, having lagged behind and, in fact, suffered to the greatest extent over the last year, the market is now starting to turn and at a pace that will ensure a cleaner bill of health come September and beyond.”

Yes Homebuyers founder and managing director Matthew Cooper said: “Please don’t be fooled by claims that homes are ‘selling’ at their fastest ever rate. This couldn’t be further from the truth and while sellers are securing a buyer at an incredibly quick pace, the time it’s taking to actually complete is significantly longer than it has previously. As a result, sales that should be done and dusted are stagnating for months on end and many are falling through as a result. You have to question if a platform with the visibility of Rightmove should be fuelling the current market hysteria and the resulting logjam by spurting fluffy statements around record-breaking market sentiment.”

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Keller Williams UK CEO Ben Taylor said: “House prices have gone stratospheric and if you believe that what goes up, must come down, then surely we must be due a correction soon. That said, there have only ever been two periods in the last thirty years where house prices have fallen over any significant time and so there are smarter bets to be made. If anything, the new Government-subsidised low deposit mortgage, and interest rates that are set to fall still further, will probably cause this explosive market to continue crackling.”

Ascend Properties managing director Ged McPartlin, said: “At the rate the current market is moving, there will be no houses left to sell. It’s great to see the North is the engine room powering this immediate market performance with some astonishing 9% plus annual rates of growth in both the North West and Yorkshire. Yorkshire alone has enjoyed a 4.2% increase on a month-on-month basis which is usually a rate of growth reserved for annual performances and really highlights how quickly the market is moving at present. If this rate of growth were to continue, Yorkshire folk could expect to see the value of their home increase by £116,000 in a single year.”

BY PETE CARVILL

Source: Property Wire

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What is driving booming UK house prices?

What is driving booming UK house prices? – The main reason for the price rise is the introduction of a range of measures by the government that has made it easier to buy a new home. These include the extension of the stamp duty holiday and the introduction of a government-backed 95% mortgage scheme to help potential home buyers.

The stamp duty holiday was first introduced in July 2020 by Chancellor Rishi Sunak to give the housing market a boost following its shutdown during the first nationwide coronavirus lockdown in March.

Support for those at risk of losing their jobs, such as the extension of the furlough scheme, and also the better-than-expected growth of the economy and the successful coronavirus vaccine rollout have also contributed to increased buyer confidence and rising house prices.

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In the past year millions of workers have spent the majority of time at home and this has been another reason for the rise in house prices. The future of office work is still not confirmed and therefore many people are now looking for larger homes out of city centres, and properties with more outdoor space and room for an at-home office.

For those workers who have kept their jobs during the pandemic, and who haven’t been spending as they usually would, the Bank of England predicts that around £100bn has been saved, fuelling the housing market further.

“The Stamp Duty holiday and other comprehensive government support measures have enabled the property market to stare down the pandemic, against all the odds,” says George Franks, co-founder of London estate agency Radstock Property. “We all know that a giant fiscal squeeze and rising unemployment are on the horizon but for now the success of the vaccination roll-out, new living requirements and exceptionally low mortgage rates have lit up the market. Even if the property market does start to cool down later in the year, an extreme lack of stock will prevent a material fall in values. In London, rising unemployment will potentially be less of an issue than in the rest of the country, as the capital’s jobs market is an ecosystem in itself. Overall, we continue to expect average UK house prices in 2021 to rise by 2% to 4% depending on property type and location.”

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What is likely to happen next?

Demand for new houses is the reason for UK house prices rising. Halifax says this trend is likely to continue for the next few months, although it is cautiously optimistic, with warnings over what might happen when the government-backed schemes come to an end and the full economic consequences of the pandemic are felt.

“Right now, there is a huge bottleneck in the property market, with large numbers of prospective buyers and not enough new stock, and this is really driving up house prices,” notes Rhys Schofield, managing director of Peak Mortgages & Protection. “The sheer volume of prospective buyers is partly due to the return of first time buyers, as securing a higher loan-to-value mortgage has got a lot easier over the past month or two. With the Stamp Duty cliff edge looming, the lack of stock may be because next time buyers have less of an incentive to move, which frees up starter homes. House builders also shifted the vast majority of their stock at the end of last year and have limited units available within the next six months. We’ve even had a client reserve a property through one of the bigger national housebuilders, which won’t actually be built until early 2022.”

By Stuart Fieldhouse

Source: The Armchair Trader

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Long-term stimulus needed to bring the housing market to life

Long-term stimulus is needed to bring the housing market fully to life, and avoid short-term peaks and troughs, according to Robert Burdett, managing director of James Leigh property Management.

Burdett believes that the stamp duty holiday is an unprecedented and very welcome shot in the arm for the housing market when it was desperately needed.

However, he said: “But with lockdown now easing and COVID-19 firmly in retreat, now is the perfect opportunity to be looking at how the housing market can be built on firmer foundations than it has previously enjoyed.

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“The introduction of the 95% mortgage is a welcome move for first-time buyers, but more needs to be done to ensure the whole market can enjoy a stable future.”

Lending criteria currently prevent some buyers from accessing mortgage finance because on paper their income is not high enough to meet the lender’s criteria for income, even though they may be paying more in rent than they would be for a mortgage.

Data released by Estate Agency firm Keller Williams show the changing pattern of where people want to live, and the outdoors features strongly in the research.

Burdett said: “The research published by Keller Williams shows that the COVID-19 pandemic has changed the way people are thinking about the homes they want to buy.

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“Working from home in particular means that people are not as reliant on access to the cities, and so can buy where they want to live rather than where they need to access work.”

Support for the housing market for the long term could include a continuation of the Help to Buy scheme and reform to the mortgage industry so that affordability reflects current household expenditure.

Burdett added: “In the end, the housing market needs measures in place that will flatten the bumps in the road and create a sustainable future market.

“If the stamp duty holiday has taught us anything, it’s that short terms measures whilst useful at the time, do nothing for longer-term stability and growth.”

By Jake Carter

Source: Mortgage Introducer

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Covid-19 has changed what buyers and renters find essential

More than a quarter of the UK’s renters and homeowners (26%) have found their property needs have changed since the outbreak of Covid-19, according to new research from Gradual Homeownership provider, Wayhome.

After more than a year of remote working and months of non-essential shops and eateries being closed to the public, previously “high-valued” property amenities have slid far down the priority list. Indeed, among the renters and homeowners whose property requirements changed amid the pandemic, the least important features are now having an easy commute to work (17%), being close to shops and restaurants (17%) and living near public transport (14%).

Wayhome’s research indicates a new set of property amenities will take precedence once lockdown lifts, given the prolonged time spent at home and likelihood of hybrid working for office-workers going forward.

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Indeed, when asked which property features had become more important since March 2020, more than a quarter (26%) said having the space for a proper home office was increasingly critical. And, given the fact so many working parents have had to juggle work and childcare commitments, the need for decent office space rose to 30% for parents, compared to 22% of non-parents.

As well as specific space for a home office, lockdown has caused a general desire for more space, be it for work or leisure. Almost a third (30%) of all homeowners and renters wanted more space in general, and a quarter (24%) said having a bigger bedroom was necessary.

And as more of us have spent time indoors, having access to a private garden has become increasingly important. 36% said this had become more important over the past year – a more popular desire among older people, especially 55-73 year olds at 52%, falling to 43% of 43-54 year olds and 35% of 24-42 year olds.

Similarly, a fifth (21%) of all respondents felt living near a public garden or green space was important to them, and the same number prioritised being near friends and family – a feature that resonated higher among women (25%) than it did for men (17%).

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Features which have become more important post-CovidFeatures which have become less important post-Covid
Garden (36%)Having an easy commute to your workplace (17%)
More space (square footage) (30%)Being close to local shops/pubs/bars and restaurants (17%)
A home office (26%)Being near public transport (14%)
Bigger bedrooms (24%)Balcony (13%)
Being near my friends/ family/ support network (21%)A home office (13%)
Being near public garden/ green space/ woodlands (21%)Off-street parking (13%)
Having an easy commute to your workplace (17%)Playroom for children (12%)
Being close to local shops/pubs/bars and restaurants (17%)Bigger bedrooms (12%)
Playroom for children (15%)Being near my friends/ family/ support network (12%)
Off-street parking (15%)More space (square footage) (12%)

This research looking at the impact of the pandemic on people’s changing property needs comes ahead of the launch of a report by Wayhome on the challenges facing the UK’s renters and homeowners.

Nigel Purves, CEO of Wayhome commented: “When you’re narrowing down your search for the perfect home to rent or buy, most of us will have a wish-list, usually split into the “essentials” and “nice-to-haves”. Our upcoming report makes it clear just how far these wish-lists have changed as the pandemic rolled on. In most cases, we’ve seen a complete reversal, with potential renters and homeowners prioritising the things that would make living and working in that space the most comfortable and fit for purpose.

“While having the flexibility to pick and choose a desired property based on its amenities and special features doesn’t seem too much to ask – for a lot of people it’s near impossible. Far too often renters are being driven into buying smaller first-homes or properties in locations that aren’t suitable. Despite earning a good income, affording a deposit big enough to secure a suitable home and hitting the affordability criteria set by mortgage lenders is unsurmountable – as evidenced by the fact full-time workers would need to spend at least 7.8 times their annual earnings to be able to afford a home in England*.

“With the end of lockdown in sight, now would be an opportune time for the industry to reassess the actual needs of renters and homeowners post-pandemic and support innovative and alternative routes that get more people onto the property ladder.”

BY MARCO CALLEGARI

Source: Property Wire

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Value of UK’s housing stock hits record high after strong year

In 2020, the total value of the UK’s housing stock reached £7.56trn, a new record high. And the north of England saw its strongest rise in housing value since 2005.

The value of the UK’s housing stock has hit the highest value on record, rising by £380bn in 2020. This is the fastest increase since 2015. And the £7.56trn equates to over four times the value of all FTSE100 companies. This is according to research by Savills, using data from ONS, Land Registry, MHCLG and UK Finance.

In the last five years, the UK’s housing stock increased by £1.33trn. This equates to an average of £266bn a year, which is some £114bn below the total for 2020. This growth is especially impressive with the recession backdrop and the prevailing economic uncertainty.

Additionally, for the first time, the value of mortgaged owner occupied homes surpassed £2.5trn. This was driven by longer mortgage terms and Help to Buy. The mortgage guarantee scheme is expected to boost this figure even further.

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A rapid increase in house prices

UK house prices increased by an average of 7.3% in 2020, despite the challenging and uncertain year due to the COVID-19 pandemic. People’s desire to move and the stamp duty holiday caused a surge in property transactions, pushing prices up and outweighing job and financial uncertainty.

After successive lockdowns and the rise in remote working, people’s property priorities changed. Many have been looking for more space. Some are also looking for dedicated home office space, high speed internet and access to a garden or balcony.

Lawrence Bowles from Savills says: “People reassessed their housing needs and preferences as a result of the pandemic and that drove a surge in transaction activity in the second half of last year.

“This triggered rapid price growth as many buyers who felt secure in their finances looked for larger homes to accommodate the multiple demands of home working and home schooling, as well as extra space for living and leisure.

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“It also meant that the total value of properties held with a mortgage rose by 6.9% as people stretched their borrowing to accommodate lifestyle demands.”

The north is seeing strong growth

The north of England, including the north-west, north-east and Yorkshire and the Humber, saw the largest annual increase in housing value since 2005, rising by £59bn. This is up from 1.07trn in 2019 to £1.13trn in 2020 which is a 5.5% increase.

The north-west and south-west are tied for the highest percentage growth in 2020 at 6.2%. The north-west’s housing stock is worth £561bn, rising by an impressive £33bn last year alone. And with major investment and development coming to the north-west, this will likely bring further growth to this region.

According to recent data from Zoopla, the north-west of England is currently leading regional house price growth, and Liverpool and Manchester is seeing the strongest property price increases on a city level.

Savills believes the north-west will be home to the strongest house price growth during the five years to 2025 with a 28.8% projected increase. Home to Manchester, Liverpool and Preston, the north-west is expected to continue leading house price growth with demand remaining high.

By Kaylene Isherwood

Source: Buy Association

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40% of FTBs in the UK have taken advantage of the stamp duty holiday

New research by regulated property buyers GoodMove has revealed that 39% of first-time buyers in the UK have taken advantage of the stamp duty holiday, and a further 8% have not yet bought a home but are planning on using the stamp duty holiday extension to do so.

Those aged 25-44 are most likely to have taken advantage of the stamp duty holiday in the past year at 42%, and 18–24-year-olds are most likely to say they either haven’t taken advantage of Stamp Duty when they bought their home (50%) and say they won’t take advantage of the holiday in the future (10%).

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House prices and deposits are at an all-time high now, with first-time buyers now requiring up to 20% of a property’s value for a deposit. GoodMove’s research found that most (53%) have saved for a house deposit by themselves, with a further 34% having help from their parents or other family members to secure a deposit.

Over a quarter (28%) of people have received money for their deposit through inheritance, 11% of Brits have taken out a loan to help them buy a home and 10% have received help from government schemes. Nearly one in ten (8%) said they have won a lot of money in the past and this helped them secure a house deposit.

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When asked what the most complicated part of the home buying process was, the top reasons were saving up for a deposit (33%), finding a good mortgage deal (32%) and the mortgage application process (28%). Just 2% of respondents didn’t think any part of the process was difficult or complicated.

Nima Ghasri, director at GoodMove, said: “First-time buyers generally have the hardest time buying a home, with securing a deposit and mortgage approvals among the hardest part of getting on the property ladder. In this campaign, we wanted to see exactly how first-time buyers and those looking to buy a home in the immediate future have bought their home and secured their deposit as well as what they found the hardest part to be.

“It’s great to see so many first-time buyers taking advantage of government schemes and also securing deposits by themselves and proves to us that the property market isn’t all that bad for first-time buyers and people can get onto the property ladder!”

Source: Property Wire

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House prices increased 7.5% in the year to January 2021

Average UK house prices increased by 7.5% in the year to January 2021, according to the latest House Price Index by the Office for National Statistics (ONS).

Prices rose by the greatest margin in Wales, increasing by 9.6% to £179,000, this was followed by England, where prices rose by 7.5% to £267,000.

Prices in Scotland increased by 6.9% to £164,000, and in Northern Ireland to £148,000, up 5.3%.

The North West was the English region, which saw the highest annual growth in average house prices up 12.0%.

In contrast, the West Midlands noted the lowest at 4.7%.

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Tahir Farooqui, chief executive of Canopy, said: “With a further increase to house prices comes an even bigger gap between hopeful first-time buyers and their new home.

“While the government is promoting a range of incentives such as 95% mortgages and a tapered end to the stamp duty holiday, it’s not addressing the true problem.

“House prices are too high and securing an affordable mortgage is a pipe-dream for many.

“One way to put to good use the £64,000 of rental payments that the average tenant spends before buying their first home, is rent tracking.

“This means each monthly payment builds up their credit score, ensuring they have better access to financial products when the time comes to secure a mortgage. A strong credit score is a foundation for financial freedom.”

Rich Horner, head of individual protection at MetLife, added: “The market is finally breathing a sigh of relief with today’s data showing strong house price growth, that will only continue to be fuelled by the Chancellor’s move to extend the stamp duty holiday.

“For the next few months, at least, buyers will be encouraged to continue their property search and make moves before June.

“There still remains an element of worry around what the second half of the year looks like as the property market, and society more broadly, returns to a level of normality after more than a year of lockdown.

“But pent up demand and a supply shortfall will work in the favour of sellers to buoy property prices.

“However, at the lower end of the market a level of reservation could move in. For a significant number the events of the past 12 months have left them in an ambiguous financial position.”

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

Miles Robinson, head of mortgages at Trussle, said: “Despite a slight fall in house prices month-on-month from December 2020 to January 2021, it’s important to note that house prices are still significantly higher than the same period last year.

“Traditionally, the property market is quieter at the beginning of the year and it’s Spring that tends to spark a change in buyer momentum.

“However, buyer demand has remained strong throughout 2021.

“At Trussle we saw a 15% increase in mortgage applications in January and a 17% increase in February, when comparing the same periods year-on year.

“The recent Budget announcement confirming an extension to the stamp duty holiday, as well as a 95% mortgage guarantee scheme is likely to continue to boost buyer demand.

“This in turn could elevate house prices even further.”

By Jake Carter

Source: Mortgage Introducer

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More Mortgages Agreed by Lenders in Early 2021

Mortgage commitments agreed by lenders were a quarter more at the end of 2020 than at the end of 2019, the private investor platform Hargreaves Lansdown has highlighted.

Advances actually paid in the fourth quarter of 2020) were also up on the same quarter a year earlier, but this time by only 4.2 per cent. In the year as a whole they were unsurprisingly down by 9.8 per cent.

The value of balances in arrears rose by 3.4 per cent in the last quarter and is now just under 1 per cent of all mortgage balances.

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‘The race for space has turned out to be more of a marathon than a sprint’, said Hargreaves Lansdown personal finance analyst Sarah Coles.

‘We’ve been snapping up mortgages at the fastest rate since the onset of the financial crisis – and that was even before we knew the stamp duty holiday would be extended.

‘The mortgage market was booming at the end of last year, and the mortgages being agreed for the start of 2021 were at their highest for 14 years’.

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Meanwhile, arrears are starting to grow, said Coles. But ‘let’s not get ahead of ourselves, arrears are still incredibly low: right now they’re at 0.93 per cent compared to 3.64 per cent in early 2009. However, during the pandemic millions of borrowers have been able to rely on payment holidays, so have been able to avoid paying without running up arrears. Now that support is winding down, anyone who’s still struggling is running out of road. When the FCA asked people in October, 19.6m expected to be struggling to pay the bills or service their debts by April. By the time we get the March figures, arrears could look much worse’.

Source: Landlord Knowledge

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The Budget stimulated an 80% rise in buyer demand

The recent Budget stimulated an 80% rise in buyer demand for property compared to the four-year average, according to Zoopla’s monthly House Price Index.

Despite this, the supply of new homes is down 13%, compared to the 2020 average.

Zoopla outlined that the volume of homes for sale is expected to recover as the COVID-19 vaccination programme continues to gather pace and the Prime Minister’s roadmap out of lockdown comes into effect.

From a national perspective, average home values are up 4.1% since the start of the first lockdown, amounting to £8,907 on the year or £750 per month.

While annual house price growth is down slightly from 4.4% last month, this marks the fourth consecutive month of house price growth over 4%.

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Regionally house price growth in the Midlands, North of England, Wales and Scotland are at an almost 10-year high, fuelled by the relative affordability in these markets.

At a city level, Liverpool and Manchester continue to show the strongest levels of annual house price growth, up 6.6% and 6.4% respectively.

Sales agreed are up 5.3% compared to the same period in 2020, and the average time to sell a property in the UK has fallen by nearly a week across the UK excluding London, down from 50 days in 2020 to 44 days.

In contrast, London is the only region in the UK where properties are taking longer to sell.

The North East and the North West have recorded the highest reduction in time to sell on a regional level, falling by 17 days and 12 days, respectively.

At the same time, the North West and Yorkshire and the Humber are the fastest moving markets in the UK, with sales agreed on properties in an average of just 38 days from the point of listing.

The index also revealed that houses are selling three weeks faster than flats.

The lockdown-led ‘search for space’ means houses are taking an average of 42 days to go from the point of listing to sale agreed, this compares to 62 days for a flat.

Demand for three-bed homes rose by 30% in the week after the Budget, in relation, the average value of a house has risen by 4.9%.

Meanwhile, the average price of a flat has increased by 1.9% over the same timeframe.

An estimated 130,000 properties for sale in England will be stamp duty free for another six months following the Budget which will amount to £123m saved in tax.

Overall, Zoopla anticipates that more than half a million buyers this year will benefit from some level of stamp duty relief.

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David Ross, managing director of Hometrack, said: “The 95% LTV mortgage guarantee scheme and the stamp duty extension outlined in the Budget have led to a spike in buyer demand, which was up 24% in the days following the announcement.

“The stimulus provided by the mortgage guarantee scheme will likely promote a similar increase of uptake of higher equity loans from the knock-on in demand up the property chain.

“With time to complete standing at around four months, buyers in the North of England look set to benefit the most – with two-third of local stock under £250,000 in value, and therefore always exempt from stamp duty.

“While prospects for the wider housing market have improved on the back of the Budget, the post-lockdown path to the full reopening of the economy and unwinding of support measures will still have a big impact.

“Therefore, we still expect house price growth to moderate later in the year, but overall transactions look set to get an additional boost from the stamp duty measures.”

Nigel Purves, chief executive of Wayhome, added: “With a full year of lockdown behind us, there has been increased momentum in the housing market ahead of the busy Spring period.

“Indeed, house prices were up by 4.9% year on year and flats were also up by 1.9% over the same period.

“Over the coming months with offices, shops and restaurants set to reopen, we may witness some individuals turning back to connectivity and convenience, while others continue their ‘search for space.

“While the introduction of 95% loan-to-value mortgages may bring hope to those wanting to step foot on the ladder, affordability remains a serious problem.

“There are many households whose incomes still won’t meet the criteria for mortgage approval, despite their ability to consistently pay rent on the kind of homes they would like to buy.

“Going forward, the government needs to work with the property industry to better support alternative routes to help ‘reluctant renters’ achieve homeownership.”

By Jake Carter

Source: Mortgage Introducer

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Cornwall replaces London as most searched location to live

Cornwall has replaced London as the most searched for location to live, according to data collected by Rightmove.

Rightmove registered over five million searches in a month in February 2021 for properties within the county of Cornwall.

The property portal suggests that people are seeking the countryside, coastal towns and villages to move to following ‘stay at home’ restrictions.

Dorset has also risen up from position 20 to position 10.

Six of the top 10 locations noting the largest rise in buyer searches over the past year have been in Cornwall and Devon.

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The village of Stithians in Cornwall has risen by a 224% on this time last year.

When looking at the second half of 2020 annual sales agreed grew by 69% in rural areas, compared to 49% in urban areas as more people looked to escape to the country.

Looking by number of bedrooms, five-bed detached homes have seen the biggest jump in sales being agreed, up by 38%, followed by four bed properties, up by 26%.

Rightmove outlined that this is also a likely result of the temporary stamp duty holiday savings being largest for more expensive homes.

The data shows that there has been a shift in more people who currently live in a city enquiring about a property that is outside of that city.

The biggest shift has been in London where this time last year 39% of Londoners were enquiring outside of London.

This has jumped up to 52%, and the trend is the same across all 10 of the biggest cities in the UK.

According to Rightmove, a year ago the most sought after property type for tenants was a two bed flat, and this has been replaced by a two bed semi-detached house, due to the desire for more space and a garden.

Asking rents over the past year vary dramatically, with double digit growth in some towns and suburbs, compared to double digit declines in areas of London.

Tim Bannister, director of property data at Rightmove, said: “The stand-out trends over the past year have been increased demand for countryside and coastal living, more people making the dream of a detached home a reality, and the increased appeal for a garden.

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“The huge population of London means that traditionally it’s the most searched for location on Rightmove, but the appeal of the coast and the countryside over the past year has seen Cornwall crowned the new capital this year.

“More space has always been the most common reason for people moving home, but the evolution for many from balancing their laptop on the end of a bed last March to making an office a permanent addition to a home, whether that’s by converting a bedroom, garage or garden shed, has led to a need for even bigger homes than before.

“This is evident with five bed detached homes seeing the biggest growth in sales, and two bed homes becoming the most sought after for people renting.”

By Jake Carter

Source: Mortgage Introducer

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