No splinters in our bum…
Forecasting the property market is no easy job at the best of times; but currently it’s harder than ever. Mid summer in the thick of the first lockdown for the UK I went on record highlighting the influx of cash going into the economy and the inability for the public to spend in a normal rate. That alongside a pent up level of demand hanging over from Brexit could and would likely create a small bubble of positivity within the housing market. On many platforms I got hammered by a few people forecasting a drastic property market crash over the rest of 2020.
Granted this correct forecast came with the assistance of a stamp duty holiday… If you scroll back through the videos you will see we also suggested that might be an option for the government too. But; this blog is not about highlighting the past, it’s about what comes next.
Here are my thoughts:
The Stamp Duty Holiday ends on 31st March and Help to Buy for second time purchasers on new builds ends:
This results in a drop in the property market activity around the 450k-650k. There will be a large reduction in properties on the market around the 250-400k price range. The 800k+ market doesn’t really change in supply and demand.
Subject to Covid-19 changes or the world economy drastically changing this would effectively mean the premium prices in the middle markets would correct and the oversupply in the lower markets would also correct. If the stamp duty tax goes back to the old original calculator then First Time Buyers would be largely unaffected anyway (other than mortgage rates).
However there will be a large drop in confidence for the UK housing market and I am sure the English media will do well to highlight this.
Stamp Duty Holiday is extended to the end of August 2021 & 95% First time buy mortgages are introduced:
Resurgence of new listings to the market in the 250-450k market from people who had given up on hitting the prior timescales for the Stamp Duty saving.
Influx in first time buyers moving away from rented payments to mortgage payments and a potential increase in demand for modern apartments.
The bubble continues subject to banks playing ball. If you would like an updated property valuation just click here.