In this market update we will cover:
1. Has the first phase of the SDT holiday killed the market?
2. Are these headline mortgage deals a smoke screen?
3. Leasehold – 1 MUST know fact
4. What We Expect To Happen In The Second Half Of 2021
5. Should you invest in a second property this year?
Stamp Duty Phase One – It’s Over…
Tears, stress and loads of money saved! That will be what July 2021 will be remembered for by most of the property related professions. But! How has it impacted the price of your home and the English property market?
- Chances are the value of your home is now higher than it was 12 months ago. Zoopla have reported a 4.3% increase, Halifax and Nationwide reported prices increased over 12 months as much as 6%.
- If you are on the search for a new home it will now be super competitive, as the flow of new houses to the market is much slower. Why? We think because a lot of planned movers in 2021/22 have brought their plans forward to save the stamp duty tax.
To answer the question above – no! The Property Market is as active as it has been for over 14 years. Will there be less transactions in the second half of 2021? Yes, we have no doubt there will be much less people moving.
If you would like to find out the value of your home now and see if it has changed then you can do that here. You don’t even need to talk to anyone, it is all online and the calculator only needs a little information from you.
Are these mortgage rate reductions or hooks?
At the time of writing this blog (July 15th) if you have a healthy deposit you can get a mortgage deal under 1%! Even a buy to let mortgage with a 25% deposit will see you paying circa 1.5% interest.
There is no doubt that these low rates are driving demand and increasing the amount of money people are happy to spend on their next home. But the question we have been asking local mortgage experts is, “can this carry on like this or will the banks stop the rate reductions?”.
Interestingly one person we spoke to (a Financial Advisor) said they actually felt the banks are putting ‘general rates’ up in the background and promoting only the rate reductions. It will be really interesting to see what the rates do over the rest of the year and if this starts to show? Watch this space, we are investigating further.
If you want to get in contact with a recommended IFA (not an in house Estate Agency broker but a local experienced company) please ask us in this ‘contact us’ form.
Leasehold Owners – 1 thing you must know!
We like to give tips and advice in our blogs. See here for some info for the owners of leasehold properties:
When the lease length changes from 80 years remaining to 79 years remaining the price of a lease extension doubles overnight.
This can be the difference of thousands of pounds!
Here is a link to another blog regarding leaseholds you might find of interest too.
What We Expect To Happen In The Second Half Of 2021
We expect buyer demand to increase and new properties coming to the market decrease. While interest rates continue to reduce, it makes purchasing a property more affordable and as a result more people looking can pay more money. Simple economics therefore show prices are continuing to climb…
One area that might be about to explode is the landlord/buy-to-let market. “I want to buy a second property” is one of the most searched property phrases into Google at the moment and with personal savings gaining almost zero growth it would appear many wealthy people are looking to invest. Buy-to-let purchasers over the last 12 months have not dominated in the market place; although a lot of let-to-buy purchases have been transacted where people took advantage of the stamp duty while letting out the previous home, to buy a new one. Watch this space…
We also expect there to be an increase in first time sellers coming to the market over the next 18 months as the ‘lockdown baby boom’ results in people moving for more space. The Avocado Family has recently had our own new addition to the group and while in hospital talking to midwifes they did say the baby boom is real and they have never been so busy!
Prices – We would expect prices to climb for the rest of the year even after the September stamp duty holiday comes to an end. So, if you’re planning to upsize now is the time to do it, because the gap between your sale and purchase is only likely to grow.
This is the same as last months and we are sticking by this forecast for now. If you want to chat with an Avocado Partner regarding a property move, then you can book in a valuation here.
Should I be investing in a second home in 2021?
Property prices continue to climb in the Home Counties. Interest rates are incredibly cheap for buy to let mortgages. Rental prices are increasing too. Three great reasons to purchase a buy to let property. Also, there is the element of an unstable stock market and low saving rates. Lots of fantastic reasons to buy your second home.
We have seen a big jump in people looking for buy to lets this year and one piece of advice we would offer is to focus on your own goal. There are so many different reasons to invest in property and also different outcomes depending on the type of property you buy. If you want to sound board someone or ask a few questions around how rental properties can work, then speak to either Tristan Lee or Mike Robson.
Hopefully you found this market update helpful and interesting. We would love you to share it in WhatsApp/Facebook with anyone else local, or friends of yours who are on the move soon too. If you want to be part of our mission to change the property industry and you are thinking of moving, then we would love you to book your property valuation with us here.