Housing Market Boom Set to Continue into 2021
Activity in the housing market has been running at its strongest pace for some time, and according to NAEA Propertymark* the number of prospective buyers registered per estate agent branch rose by a third from August to September this year. This means that it is the highest number of house hunters recorded since June 2004.
The housing market is usually at its busiest during September with buyers hoping to complete their transactions before the festive period. However, this year with the added incentive of completing your purchase before the stamp duty holiday deadline, we’ve seen many more properties coming on to the market than usual. In fact, there is an average of 13 buyers to every available property!
This has been hugely beneficial for the housing market during the uncertainty of coronavirus restrictions and worsening economic news. It has also boosted mortgage approvals which are now ten times the level seen during lockdown, and are at their highest since September 2007.
This surge in market activity has driven house prices upwards slightly, but notwithstanding the many positive factors supporting the market in the short term, it is unlikely that this level of price inflation will be sustained due to the labour market possibly forcing downward pressure on house prices in the medium term.
The country’s economic picture is hoped to become clearer over the next few months, but in the meantime, in order to keep such a healthy housing market it is hoped that the government will extend the deadline for the stamp duty holiday, or at least to taper it off instead of having the cliff edge stop.
It has also been suggested that it would be beneficial for lenders to loosen their criteria slightly. This would allow first time buyers to access the market more easily by offering higher loan to value mortgages; as currently they make up just 19% of sales, possibly due to a lack of deposit funds.
*NAEA Propertymark is the UK’s leading professional body for estate agents, promoting the highest standards in estate agency.