Good News For Sellers – Prices On The Up As Demand Grows
Despite all the current challenges posed by lockdown, the property market has remained open and there seems to be a brighter path ahead thanks to the successful rollout of the vaccine to the most vulnerable groups and signs that the second wave has passed its peak. And it remains a good time to sell, with changed priorities, the stamp duty holiday boosting demand and positive selling conditions all helping to fill sellers with cheer. This has been confirmed in Rightmove’s latest House Price Index, which shows that house values are back on the up as upwards price pressure resumes. Here, we take a closer look at the latest findings and what they mean for sellers.
The number of new buyers continues to grow
The number of new buyers entering the market is still increasing, according to Rightmove, despite it now being too late for most to beat the stamp duty deadline. This suggests not all are factoring in the stamp duty savings when looking to buy a new home. They may, in many cases, be first-time buyers who will still be free from stamp duty on their first home even after the holiday ends. There is now strong speculation that the stamp duty holiday will be extended for certain buyers
, to avoid a cliff-edge scenario. Quoting an unnamed government source, the Daily Telegraph has reported that Chancellor Rishi Sunak may extend the March 31 deadline by six weeks to mid-May, to avoid tens of thousands of fall-throughs and a ‘completion trap’. “It is certainly the case that a lot of people would be caught in the completion trap if the holiday were to end when it is due to,” the source said to The Telegraph. However, there was no mention of what would happen to those buyers whose transactions are now underway but may not be complete even by mid-May. Transactions are, for obvious reasons, taking much longer to work their way through the system to completion at present. For example, Rightmove found that one in five buyers who agreed on a purchase in July 2020 have still not completed it more than six months later. The portal has predicted that an estimated 100,000 buyers are still likely to miss out on their expected stamp duty savings. Despite this, people are not being put off and demand is remaining robust. This means upwards pressure on prices is being sustained. Following three consecutive monthly falls, the latest index found that the average price of property coming to market increased by 0.5% (+£1,522) in January. Meanwhile, the number of visits to Rightmove is up by 45% in the first week of February this year compared to 2020, during the post-election Boris bounce. According to the findings, eager home-hunters are sending 18% more enquiries, while the number of purchases agreed is up by 7%. High demand is outstripping supply and pushing up prices. New seller numbers are 21% down on last year, as owners of family homes in particular delay coming to market, potentially due to home-schooling distractions at present.
Surprisingly buoyant data
Rightmove says its whole-of-market view shows some surprisingly buoyant data, especially when considering the expected loss of market momentum caused by the end of the stamp duty tax holiday. The rise of 0.5% in the average price of property coming to market is being fuelled by both a shortage of supply, with fewer new sellers coming to market, and increased demand, with all of the website’s indicators of buyer activity being ahead of the same period last year. Tim Bannister, Rightmove’s director of property data, said: “Last year, the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs. We may well be seeing a continuation of that this year. Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’.” He added: “As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure. These are strong signs that new buyer demand is not facing a cliff-edge after March 31. It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.” Rightmove’s latest analysis revealed that of those buyers who agreed on a purchase during the month the stamp duty announcement was made in July last year, one in five are still stuck in the logjam, more than six months later. This is double the proportion of the previous year, when only one in ten purchases that were agreed in July 2019 were still waiting to complete at this time last year. This means that even someone who agreed on a purchase the day after the stamp duty holiday was announced could still miss out on stamp duty savings if the deadline isn’t extended. Throughout January, buyer demand was ahead of the same period in 2020 and is even stronger in all key metrics for the first week in February compared to a year ago. The pipeline for future sales is also looking strong, with the number of prospective buyers sending enquiries to estate agents up by 18%, and the number of visits to Rightmove up by 45%. This is helping to keep prices edging upwards despite the current economic challenges. The ‘second-stepper’ and ‘top of the ladder’ sectors with three bedrooms or more – those most likely to be facing the challenges of juggling home-schooling, work and daily life – have seen 25% fewer new listings between them. By contrast, properties with two bedrooms or fewer are only down by 16%. “So far in 2021 home-schooling has taken priority over home-selling for some people,” Bannister said. “Family properties are suffering most, with the difficulty of preparing a property for marketing and viewings while it’s in use and occupied 24/7 by the whole family likely to give you cause to delay.” “Ironically, whilst it’s too late for the stamp duty holiday, there are good reasons to come to market now, especially if selling a property suitable for a family. There are more possible buyers looking and fewer suitable alternatives to divert their attention away from yours. An early start to the selling process will also help to get you sold, moved, and settled in before the new school year.” He added: “With the current speed of the vaccine roll-out, that new school year will hopefully be spent in schools and out of the home, but many of the other new needs for more space both indoors and out will remain.” To improve your chances of selling for the best possible price, and in the quickest possible timeframe, it’s vital that you work with an experienced local estate agent. If you want to find out more about selling a home in Peterborough and other parts of Cambridgeshire over the next few months, please get in touch with us here
. You can also find out how much your home could be worth by using our instant online valuation tool