Budget boost

This week in five seconds

• Budget announcement delivers a boost for the property market:

1. Stamp duty holiday extended to June and tapered to September
2. Government guarantee for 95% residential mortgages up to £600k
3. No announcement on capital gains tax yet

• Rightmove records busiest day ever
• Mortgage approvals in 4Q20 hit highest level in 13 years
• Viewings, listings and bids all picking up

Budget announcement delivers a boost for the property market

Wednesday 3rd March saw Rishi Sunak announce a generous Budget: 

• Stamp duty holiday extended to June and tapered to September -
  The nil-rate stamp duty band up to £500k will finish at the end of June, rather than the end of March. It will then be tapered until September with houses up to £250k having no stamp duty.
  Currently the average time for a seller to find a buyer is 65 days nationally, and Rightmove estimates that it is currently taking a further 126 days to go through the legal process to completion (191 days, 6.4 months).
  Based on this, sellers sub-£250k should be looking to come to market by Tuesday 23rd March if they want to make sure their buyers can make use of the tapering end to the stamp duty holiday by the end of September.
  
• Government guarantee for 95% residential mortgages up to £600k - Residential property buyers (not second home or buy-to-let) will get a “government guarantee” on mortgages, with a deposit of 5% to purchase properties worth up to £600,000. (Gov link)
  
• No announcement on capital gains tax yet - There has been no announcement on Capital Gains Tax, prompting speculation this will be the subject of extensive consultation beginning on March 23 with the release of so-called 'tax day' proposals.

Rightmove records busiest day ever

Rightmove saw an immediate spike in activity on Budget Day with visits to its website surpassing 9 million for the first time, overtaking the previous record of just over 8.5 million visits recorded last week. 

Mortgage approvals in 4Q20 hit highest level in 13 years

The number of mortgages approved by lenders in the final quarter of last year hit the highest level for 13 years. Residential property purchase lending was highest in December, up 31% compared with the same month in 2019.

Despite this uptick in activity, annual purchases for the whole year were around a tenth lower than the previous year, due to a complete shutdown of the market in the first lockdown.

Viewings, listings and bids all picking up

At Movewise we have seen activity in the sales market pick up quite significantly this week, although the variation across the country is marked.

Viewing activity has generally increased with buyers who were waiting for the budget now being able to make their purchasing decisions based on some certainty.

Despite the general increase in viewing activity, the number of offers agreed has been varied with properties in some areas attracting competitive bidding whereas in other areas, where supply of listed properties has already increased, buyers who aren’t time constrained are hedging their bets and waiting to see what else comes onto the market before committing.

Agents in London have taken on a lot of property and purchasers are sitting on their hands, waiting to see what else comes on.

In other areas there has been a lag, so there are lots of valuations taking place but still a lack of property listed, so there is competition amongst buyers to purchase and bidding wars have become quite commonplace.

Notably in the South West (eg. Devon) some property is not even coming onto the market as there is nothing for sellers to buy so the market is a little frozen.

If you are considering selling, speak to your local agents and find out if there are any current trends in your localised market so that you can focus your sales strategy accordingly. Is there a high or low supply of properties like yours? Is there or is there not a pool of buyers waiting for a property like yours? If you are also looking to find an onward purchase, is there a good choice of property available in the area you are looking to buy in?

Have a great week.

The Movewise Team