Property expert David Leake of Housesetc tells us about how the current health crisis has affected the property industry and how now could be the right time to buy.
It would appear that there has never been a better time to buy and sell property.
With historical low interest rates plus the recently announced Stamp Duty Holiday for homebuyers means movers and investors could save up to £15,000 until March 2021.
The stamp duty holiday offers substantial savings for existing homeowners moving to more expensive properties. In England and Northern Ireland, instead of stamp duty kicking in at £125,000, it will now only apply at £500,000 – meaning big savings for people moving up the property ladder.
Investors can also benefit from the tax giveaway. Previously, an investor buying a £500,000 home would have needed to pay 3% on the first £125,000 (£3,750), 5% on the next £125,000 (£6,250) and 8% on the remaining £250,000 (£20,000), resulting in a stamp duty bill of £30,000. Now, though, they’ll only need to pay 3% on the whole £500,000 (£15,000), resulting in a saving of £15,000.
• UK house price inflation is +2.4%, up from 1.6% at start of year. UK city price inflation slows to +2.1%.
• UK house price growth is expected to remain at around +2% over the next quarter. Downward pressure on prices is not expected to materialise until much later in 2020.
• New sales are back to pre-Covid levels, as is the flow of new supply although the stock of homes for sale is 15% lower than a year ago. This will support prices in the short term, but demand is starting to fall off a high base and we expect it to decline further over the summer months and into the autumn.
The bulk of new pricing evidence continues to come from sales agreed before the lockdown. Data on pricing for new post-lockdown sales agreed is starting to feed through and points to a resumption in the upward pressure in house prices seen at the start of the year. The headline rate of house price growth is expected to remain in the 2-3% range over the next quarter. We do not see any downward pressure on prices materialising until much later in 2020.
Asking prices for sold homes are 7% higher than last year. One indicator is the average asking price for homes marked as sold on Zoopla in the first 2 weeks of June which are 7% higher than a year ago (on a non mixadjusted basis). This is a return to levels seen over the first quarter of 2020. We are not saying the growth rate in our UK house price growth is going to rise over 5% in the near term, but the general direction of the two series track each other over time supporting our view that house price growth will hold up in the near term.