Earlier this year it was unclear what the coronavirus pandemic would mean for the housing market. With so much uncertainty some experts predicted there could be a slump in people looking to buy in 2020.
However, the past few months have shown a real boom with people looking to purchase properties – particularly now the stamp duty holiday is in place.
But it’s not just first time buyers wanting to make the most of this. New research has found that sellers are reducing their asking prices to ensure deals can take place before the stamp duty holiday ends in March.
According to a new report from Rightmove, average UK asking prices dropped slightly over the last month (by 0.5 per cent) but the market is significantly busier than this time last year. In fact, the number of sales agreed has risen by as much as 50 per cent, compared to October 2019.
So anyone on the hunt for a new property could find that sellers are lowering their prices in order to sell faster.
Tim Bannister, Rightmove’s director of property data, said, ‘Given the ongoing mini-boom, prices might have been expected to rise again this month, but instead we have a slight dip which could be a result of some new sellers pricing more realistically to have a better chance of agreeing a sale in time to benefit from the stamp duty savings on their onward purchase.’
However, there are still concerns that buyers who agree to purchase now may not be able to complete before the end of March – this means they might still have to pay the full rate of tax on their new property. As it stands, stamp duty needs to be paid in full within 30 days of the completion date.
The average UK homebuyer is saving around £5,475 in stamp duty at the moment, but some could have to pay significant amounts if the stamp duty holiday deadline is missed.
Part of the problem is that surveyors, mortgage lenders and property lawyers are struggling with the sheer volume of property transactions. Rightmove estimates there are around 650,000 residential transactions currently in the process at the moment – which is a 67 per cent increase on the same time in 2019.