Industry reaction to the latest hike in asking prices

House prices are forecast to keep on climbing next year in spite of the end of the stamp duty holiday deadline, which is due to end at end of next month, according to Rightmove.

The average price of property coming to market this month is up 0.5%, or £1,522, as demand continues to heavily outweigh demand, the data shows.

Based on the figures provided by the portal, the average asking price in the UK now stands at an average of £318,580.

Industry views:

James Forrester, managing director of Barrows and Forrester, commented: “A few thousand saved in stamp duty isn’t the make or break cost of buying a home and so while many current homebuyers are likely to be disappointed come April, the market will continue to lift as buyers largely stick with their purchases.

Looking at life after the stamp duty holiday, we can expect further government stimulus to help aid a quick economic recovery and it’s very likely we could see a negative interest rate push mortgage rates to sub 1%. As a result, the market revival that was initially spurred thanks to a stamp duty holiday should live on long after it has expired.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The property market is proving much more resilient than many gave it credit for.
“Even though the chances of beating the stamp duty deadline by the end of March are now probably slim at best, we’re seeing many buyers and sellers shrugging off lockdown restrictions and the prospect of further economic bad news.
 
“Although viewing and sales agreed numbers are not at the same level as their pre-Christmas frenzy, activity remains fairly solid. So many moves were brought forward that transaction numbers in the second quarter will inevitably dip.
 
“However, prices are holding up quite well, supported by the continuing shortage of stock at the right price and location, as well as reasonable availability of competitively-priced mortgages – even higher loan-to-value products.
“Another good sign is that most sales agreed are proceeding without renegotiation.
 
“We expect some frantic negotiations as the stamp duty holiday nears its end and those buyers missing out hoping their sellers will share some if not all of the saving.”

 

Director of Benham and Reeves, Marc von Grundherr, commented: “Many have been quick to jump on a consistent decline in asking prices in previous months as signs of the market running short on steam. However, even with the boost of a stamp duty holiday, the market is susceptible to the usual seasonal trends and so slower market conditions over the Christmas period and into January are certainly nothing new.

Now that we’ve found our feet in 2021, buyer enquiries are once again starting to surge as homebuyers and sellers remain in lockdown, allowing them to focus on their plans to transact. As always, this growing demand far exceeds the stock available and this market imbalance will ensure property values stand firm despite the end of the stamp duty holiday, as they have done through far trickier market conditions.”

 

Michelle Gallagher, sales director at JDG Estate Agents in Lancaster, said: “2020 saw a mini-boom in Lancaster and this has continued in 2021, with our sales activity in January being up 23% in the LA1 postcode, and we’re seeing a trend of prices rising more quickly in our rural locations. Buyer demand is up, fuelled by the need for more space as more people are having to work from home. For many, homes are shrinking with the kids being home due to home-schooling.

“The problem now is the lack of supply, and as such we’re seeing inflated asking prices on some properties. There is no doubt many home sellers have delayed moving plans due to covid, lockdown 3.0, furlough and home-schooling. It’s more important now than ever that agents continue to demonstrate safe viewings and valuations with online videos and virtual viewings as a first viewing step. We’re now doing 95% of all our valuation appointments by video call.”

 

Kate Eales, head of regional residential agency at Strutt & Parker, said: “We’re seeing some would be sellers concerned about viewings and the practicalities of putting their property on the market right now. Some are waiting until restrictions ease before marketing their home and as a result stock levels are down.

“Last year we saw demand rise for family homes off the back of people’s experiences in lockdown and this is where we are seeing the biggest shortage of stock. But at the same time buyers are still out there and we are still registering a large number of new applicants. With this demand there is an opportunity for sellers who want to get ahead of the race likely to come when government restrictions ease, to start thinking now about marketing their home.

“We’ve seen solicitors being swamped with business and unable to cope with the increased demand, in some cases they are turning away customers. This has been exacerbated by the time in which it’s taking some local authority searches to come back too.”

 

Tomer Aboody, director of property lender MT Finance, said: “The latest lockdown and impact of homeschooling has taken priority over home-selling for many, as we see the true reality of ‘working from home’. Efficiency is reduced as many are unable to remain truly focused, with children providing the main distraction. Everything takes longer – the usual workings of a mortgage application, for example, are protracted when staff cannot communicate face-to-face. 

“That said, the market is still proving its resilience. Buyers are still keen to move and less concerned about the stamp duty relief than many would have thought, realising they are either too late to take advantage of it, or happy to swallow up the extra fees in order to buy their dream home, especially as mortgage rates remain low.

“Confidence is only likely to be boosted as the vaccine rollout continues and a return to some sort of normality becomes increasingly possible. There will also be many potential sellers waiting for lockdown to end in order to take advantage of considerable pent-up demand.”

 

Richard Freshwater, director at Cheffins in Cambridge, commented: “Lockdown number three brought with it a drop in the number of property valuations taking place. This has created a lack of new available stock in the market, particularly in the higher price brackets, which we forecast will bring with it a rise in property values.

As valuations are currently down by around 20 per cent in comparison to January 2020, we are seeing increased competition in the market as there continues to be a ferocious appetite from buyers. As the shortage of supply is unlikely to be addressed until the vaccine roll out is in its later stages, frustrated buyers will continue to struggle to find the type of home which they are looking for.

“Until the demand versus supply equation is balanced out, competitive bidding is likely to increase causing inflated property values. It is also therefore possible that any deflation to the market caused by the end of the stamp duty holiday will be stabilised by an increase in prices, unless stock levels begin to rise.

“Whilst looking into a crystal ball it is difficult to predict the behaviour of the market for this year, there is a very real issue with stock levels, particularly for the larger homes which tick all the boxes for buyers, especially those leaving London.

“As momentum builds behind the calls to extend the stamp duty holiday, the Chancellor’s announcement on the 3rd March ought to help bring some clarity to how market trends might take shape throughout 2021. For us in Cambridge, we have an incredibly active buyer base looking for both city centre and countryside homes, all of whom are competing for the best properties on the market at the moment.”

 

Matthew Cooper, founder and managing director of Yes Homebuyers, commented: “Although market activity remains buoyant, there are certainly dark clouds beginning to build on the horizon. We’ve never been in a situation like the one we’re currently seeing, where so many homebuyers are delayed for months on end. There will be a serious number of sales that fail to complete before the end of March, at which point we could see mass fall throughs as buyers look to change the goalposts at the last minute in order to account for the additional cost of stamp duty.

“Such a drastic drop in transactions is almost certain to cause house prices to fall and while this may only be a temporary drop, it will no doubt be prolonged due to the tricky economic climate caused due to Covid.”

 

Aldo Sotgiu, managing director of operations at Arun Estates, said: “We’re seeing high levels of buyer activity and demand remains strong but the number of new listings coming to the market is a concern with many potential sellers preoccupied with the wider problems associated with the pandemic.

“In addition, sellers now realise that they won’t now complete before the end of March and be faced once more with a full stamp duty bill on their onward purchase. All things considered it’s encouraging to see the current demand for property with the levels of new enquiries outstripping the supply of new listings coming to the market so prices are holding up well.

“Moves may be jeopardised by the time it’s taking to progress from offer to completion having extended dramatically as the vital supporting services struggle to cope with the huge increase in sales last year. It really is a perfect storm of unprecedented activity and economic stimulation colliding with limitations brought about by the shift to home working and reduced capacity in conveyancing firms, local authorities, mortgage lenders and surveyors.

“With the Budget looming there is significant pressure on the chancellor to leave the door open and extend the stamp duty holiday or to make a concession for sales already agreed. As the vaccine roll out gains momentum, we suspect the supply of properties will get back to more normal levels in Q2 and beyond.”

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