The COVID-19 pandemic has had a significant impact on the property market, but latest figures indicate there are positive signs of growth following the introduction of the Stamp Duty holiday.
Property searches rise
Coinciding with the Stamp Duty cut July was the busiest month so far this year for mortgage searches. The largest rise occurred in the £500,000 – £1m region, with Stamp Duty savings making these properties more accessible. Remortgage levels have remained consistent with pre-lockdown levels and purchase levels have quadrupled. Searches from first-time buyers are also up.
House prices jump
On another positive note, house prices rose by 7.5% year-on-year in October bringing the average price to £250,457, according to data from Halifax.
Pent-up demand and a low supply of available homes, plus support from the Stamp Duty holiday, has helped to exert upwards pressure on house prices. This, along with a significant jump in mortgage approvals and signs that confidence is growing, suggests the immediate future for the housing market is looking brighter. However, Halifax also warned that looking further ahead, there is still much uncertainty around the lasting impact of the pandemic, particularly as government support measures come to an end.
Increasing interest from overseas
The Stamp Duty cut has also led to a surge in interest in the UK property market from overseas. In addition, many overseas buyers are looking to purchase property before the introduction of an extra 2% Stamp Duty surcharge for non-UK buyers in April 2021.
Throughout July, highly searched terms by mortgage advisers included ‘visas’, ‘expats not in the UK’ and ‘foreign income’. One in 22 residential searches related to a query for an applicant currently on a visa or an expat not based in the UK.
How the Stamp Duty holiday works
On 8 July, the threshold at which Stamp Duty became payable on properties was increased from £125,000 to £500,000. This means almost nine in 10 buyers will pay no Stamp Duty before the holiday ends on 31 March 2021.
For those purchasing properties the rates are as follows:
- 0% – £0 to £500,000
- 5% – The part from £500,001 to £925,000
- 10% – The part from £925,001 to £1.5m
- 12% – Anything above £1.5m
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.