It’s a strange time with so much uncertainty, not just in the property market but in life generally. With constantly changing rules that govern large parts of our lives, deciding if it is the right time to buy a property is daunting.
In March, when the economy locked down, the property market went on hold as moving was not advised by the UK government due to the national lockdown. In mid–May, the property market came alive and property sales exploded to a level not seen for some time. On Zoopla & Rightmove, they estimated there were £37 billion worth of transactions between July 12 and August 8th 2020.
Property sales have been increasing steadily in recent years, but currently they have increase by 20% on the previous year, higher than the record set in March 2017.
This current mini-boom has no sign of slowing down, with weekly sales figures between August 5th and August 12th up by as much as 60% compared to the same period last year. Some of this is due to the government incentive of no stamp duty on properties up to £500,000 across England, applicable to first time buyers, home-movers, and second property purchases (although second properties do still attract the 3% stamp duty surcharge). This means that people have seen a window of opportunity; they may have some spare money not spent on a holiday, and they have the opportunity to buy a property free of stamp duty (or significantly reduced in the case of second properties).
Stamp duty on a property worth 500k was £10000 before the recent government incentive for COVID, now it is zero.
Stamp duty on a second property with a value of £500,000 was a massive £30,000. Now you would only pay £15,000 - a whopping £15000 in savings.
Consequently. people are fighting over properties & pushing prices up. There is also an issue with getting a mortgage due to increased and tougher levels of underwriting. Some surveyors are down-valuing properties due to Coronavirus and fear of a possible market crash. Its made it a difficult decision as to whether its the right time to buy a property.
If you are moving home, then it may be a good time as increased property prices can be offset by the one you are selling. With no stamp duty up to £500,000, if you can secure a property (and a mortgage if necessary), then it could be a good time to move .
For first-time buyers who have had stamp duty incentives before the pandemic it might be best to hold tight, as the boom might come to an end with the possibility of prices dropping when the economy potentially goes into post-pandemic recession. Additionally, the government is promising more incentives for first-time buyers in the coming years.
Buy-to-lets - a lot of investors were expecting a significant price drop, but are seeing a boom in in the market so are torn between low stamp duties and increasing prices.
So, in summary, it may be good for some but not for others to buy or to move home.
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