As we continue to ease out of lockdown, now could be as good a time as ever for sellers to sell their home fast and for the best possible asking price.
A perfect storm of factors is coming together to help sellers, including a post-Covid surge in demand and activity, further driven by the recently announced stamp duty holiday and record-low interest rates, and the fact that people will want to move in the summer while the weather is good and the chances of a second wave of Covid-19 are lower.
Below, using our experience of operating in the London, Essex and Kent property markets, we outline four reasons why now is the perfect time for sellers to list.
Since the property market was allowed to reopen on May 13, all the findings have pointed to a resurgent market as frustrated buyers have sought to act decisively and sellers have been keen to take advantage of this rise in demand.
Lockdown gave a lot of people a lot of time to think, and in many cases that included thoughts about moving home – perhaps for a bigger home or outdoors space, or a switch from the city to the country now that remote working has made living centrally or commuting much less important.
According to Rightmove, Britain’s housing market has enjoyed a post-lockdown mini-boom fuelled by last month’s stamp duty cut, which has pushed asking prices to a record high.
Buyer enquiries have reportedly been through the roof since Britain was able to move again, with a mixture of pent-up demand being released, the stamp duty holiday and homeowners rethinking their lifestyles and life plans helping to create a massive boom in activity.
Rightmove’s latest figures showed that the average price of a property coming on to the market in the UK reached £320,265 in July, the highest figure since the site first launched its report in 2001. The figure was up 2.4% (just over £7,000) on the previous record of £312,625 reported in March, just prior to the housing market being put into freeze mode.
Rightmove said that, in total, enquiries from prospective buyers were up by three quarters (75%) year-on-year in the UK.
“The busy-until-interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown,” Miles Shipside, Rightmove’s housing market analyst and a director at the portal, said.
The aforementioned stamp duty holiday – which means buyers of all homes worth up to £500,000 in England and Northern Ireland need not pay the tax until March 31 2021 – has accelerated what was already robust demand. The change, announced by the Chancellor Rishi Sunak in his summer economic update on July 8, had an immediate effect, according to Rightmove. This effect had been to ‘amplify the buyer surge’, the portal added.
A Rightmove spokesman revealed that the number of home sales agreed during the five days after Sunak’s address to the Commons – between July 8 and July 12 – had increased by 35% on the same period 12 months ago, more than double the 15% rise seen in June.
Given the stamp duty holiday is time-limited – coming to a close at the end of March next year – second, third and fourth steppers, downsizers and buy-to-let landlords, who all benefit from the cut, will be keen to act before the holiday disappears.
Even some first-time buyers of more expensive homes, who weren’t covered by the exemption of stamp duty for first-timers purchasing homes under £300,000, will now in all likelihood pay no stamp duty whatsoever if they buy before the end of March 2021. In fact, Sunak said 9 out of 10 buyers of main homes will face no stamp duty as a result of the holiday.
Pent-up demand being released gave the housing market its initial post-lockdown boost, but the stamp duty holiday was designed to sustain that momentum and aid the sector’s long-term recovery – although there are concerns from some about a late surge before the holiday ceases next year, which could leave conveyancers, lenders, brokers and surveyors unable to cope with the volume of demand.
As well as the stamp duty holiday and various other initiatives to encourage buyers to buy, purchasers also find themselves in an environment of record-low interest rates. To protect the economy against the coronavirus, the Bank of England slashed its base rate from 0.75% - where it had stood since August 2018 – to 0.25% in March 2020.
Then, just over a week later, as the coronavirus crisis worsened and economic devastation threatened, the Bank’s Monetary Policy Committee – which decides on any changes to the base rate – cut it further to 0.1%, the lowest ever rate in the Bank’s 325-year history.
Borrowing conditions are of course improved when interest rates are very low, and so the change has been to the benefit of buyers seeking to secure a mortgage on favourable terms. As a result, the mortgage market has become very competitive as lenders seek to attract custom by offering the best deals.
While the number of 95% and 90% mortgages have fallen dramatically since the pandemic took hold, as lenders veer away from these riskier deals, there are signs that these are starting to recover, while the recent extension to the Help to Buy scheme by two months will further encourage buyers who can no longer access higher loan to value mortgages.
For sellers, the more buyers looking to buy, the better, as you’ll have a much bigger pool of potential purchasers to target your home towards, increasing your chances of achieving your asking price or above.
Your home will never look better than it does in summer, especially when the weather is playing ball. Any garden or outdoor space, in particular, will be given the chance to shine. And, as we know, every bit of research in the last few months has pointed to garden space as an increasing priority among a significant chunk of home movers.
With the possibility of further local or national lockdowns as we enter the winter months, and contend with a possible second wave of infections, it’s likely that buyers will want to act early to be in their new homes, and settled, before that point. As a seller, you can help your cause by providing a clean, tidy, welcoming and attractive home, getting the asking price right, and working with an experienced local estate agent who will enable you to get to grips with the new normal when it comes to selling.
Here at Balgores Property Group, we are dedicated to helping our clients buy and sell property in the safest possible manner. For more information on our current operations, please contact one of our branches.
If you want to find out how much your home could be worth on the current market, be sure to check out our instant online valuation tool today.