Every cloud has a silver lining! With the pandemic causing so much upheaval in our lifestyle, it is good to know that the UK housing market has remained relatively stable and expects a boom in home sales in the early part of 2021. Estate Agents in Buckingham and, in fact, almost anywhere in England will agree with this.
Some of the reasons for this prediction are:
Stamp duty holiday: The exemption of stamp duty land tax to home buyers (for properties valued at up to GBP 500,000) in England and Northern Ireland will cease when the “holiday” comes to an end on 31 March 2021. According to the estate agents in Aylesbury, there will be a rush for home sales before that time. The benefit usually goes to the buyer, who pays the tax. However, the seller sometimes comes out on top too. Knowing that the buyer will be saving on the stamp duty, he may ask for a higher price, especially in more expensive properties, where the stamp duty can be high. An experienced real estate agent will negotiate between buyer and seller to get the client’s ultimate benefit.
The possible extension of the stamp duty holiday, though not yet known, will continue to increase home sales.
Demand: The demand has exceeded the supply in the property market, which is one reason for the predicted hike in home sales. Many people are looking to change their living arrangements and would like to have more space and facilities. This increases the demand for more deals.
Time-saving: With the rush to buy property, sales agreements are going through in a shorter time, which ultimately leads to more property being sold quickly.
Rental: Due to the lockdown, loss of jobs or being put on furlough, more people work from home. They are looking at the conveniences of living and working from home, which leads them to consider the comfort aspect. For this, they sometimes find it more feasible to rent away from expensive city areas. The demand for rentals in these areas is always there. Despite the price rise due to demand caused by the pandemic, buyers can get tenants, which is an incentive for a surge in home sales.
Covid vaccine: Contrary to the above, with the expected Covid vaccine, the economy will profit, and the employment status should improve. This hopefully will slowly but steadily bring things back to almost normal. It will also affect the property market in cities, with buyers purchasing property either for their own homes or for rental. The stamp duty tax holiday, with a gradual tax for the balance amount (over GBP 500,000) will benefit buyers of more expensive property in the cities.
Location: To avail of the stamp duty tax holiday, the property’s cost should be less than GBP 500,000. Such properties will probably be away from the big cities, towards the suburbs or away. Hence, the location is essential, and an excellent real estate agent will suggest suitable places to meet the budget and area requirements.
Interest rates: Interest rates affect property sales. The lower the interest rates, the lower the borrowing cost to pay for a home, but the price maybe more. Raising interest rates will also raise the cost of the purchase and reduce mortgage availability. When interest rates fluctuate – soar and dip – then the most severe effect is noted. However, with the gradual rise in the interest rate that the Bank of England is predicting, it should help investors.
Mortgages: Rates on mortgages are still competitive with the availability of some low-deposit mortgage schemes. Also, the fixed-rate mortgage, where the interest rate remains the same for an agreed period, can offer the buyer relief. This way, an exact amount will need to be repaid each month. A trained estate agent can help in choosing just the right mortgage.
Savings: Unexpectedly, during the pandemic, many people have not spent money as they usually would and find that they have been “accidentally” able to save a reasonable amount, which some would like to invest in their own home. Though not on a huge scale, this could also account for more home sales.
Conclusion: Predictions do not always come true. With the pandemic complications and its effect on the economy, one does not know how things will work out. However, based on the above, the property rebound prediction, at least for the early part of 2021, should come to pass. As with any financial decision, much thought will have to be given to all aspects – budget including cost and the various fees, the type of property, reason for purchase, location, and resale value. This is where a trained and professional real estate agent can be invaluable.