Average asking prices for homes started to fall in the past month, as sellers look to lure in buyers before the end of the stamp duty holiday on 31 Ma
Average asking prices for homes started to fall in the past month, as sellers look to lure in buyers before the end of the stamp duty holiday on 31 March, according to new findings.
Asking prices fell by £2,887, or 0.9 per cent over the past month, property website Rightmove’s new data has revealed.
The imminent end of the stamp duty holiday and economic fallout from the pandemic are ‘clouding the 2021 outlook’, warned Tim Bannister, a property data director at Rightmove.
Property matters: Find out what’s happening to house prices where you live
Swathes of new buyers are unlikely to complete before 31 March and there are now a whopping 613,000 homes sold subject to contract still awaiting legal completion, Rightmove said.
The online property portal thinks around 100,000 buyers could end up being lumped with an unexpected stamp duty bill because their sale is yet to complete.
With the completion logjam worsening rapidly, it now takes over four months, or 126 days, to get a house sale deal over the line.
‘This means that new buyers in the market should not be factoring in any stamp duty savings, unless they are first-time buyers, who will still be mainly exempt after the March deadline has passed’, Rightmove said.
Matthew Cooper, founder and managing director at Yes Homebuyers, said many buyers will still be entering the market with hopes of securing a stamp duty holiday discount.
‘The unfortunate reality is that they have more chance of seeing Matt Hancock answer a question with a straight answer than they do completing on a sale with current market delays.
‘To describe the current logjam as mammoth is no exaggeration and while you could argue it’s a great problem to have, homebuyers stuck in the property market waiting room will be desperately hoping their ticket number is called prior to the end of March.’
Interest from prospective buyers and sales figures remain relatively ‘robust’, and Rightmove said it saw the number of agreed sales rise 9 per cent in the past month, compared to the same period a year ago. For the year as a whole, sales are up 10 per cent and prices are up 6.6 per cent.
The online portal said it saw visits to its website rocket by 33 per cent in the past month, while the number of queries being made by buyers direct to estate agents rose 12 per cent on a year ago.
In terms of the type of homes people are after, many buyers are still looking for more space and a decent garden as they continue to shift their priorities during lockdown.
Matthew Smith, a director at Thornley Groves estate agents in Manchester said: ‘The Manchester suburbs, places such as Sale and Altrincham are absolutely flying. People are looking for more outside space.’
Virtual viewings are still on the rise and in-person viewings are being undertaken with safety measures like mandatory face masks and limited timeframes in place.
Looking ahead, Rightmove’s Mr Bannister said: ‘As we enter the new year and a new lockdown, the housing market remains open but is focused on the imminent end of the stamp duty holiday and on the challenges of the pandemic.
‘These major influences on mover behaviour are clouding the 2021 outlook, but Rightmove’s early January market-leading indicators of buyer demand and the number of actual sales being agreed are looking robust, showing that there are many compelling reasons other than the stamp duty savings to make buyers enter the market in 2021.’
Changes: A chart from Rightmove showing monthly shift in average asking prices
Wider trend: Shifts in national average asking prices, according to Rightmove
What’s happened to prices where I live?
With a 2.7 per cent drop, London saw the biggest monthly fall in house prices in the past four weeks, according to Rightmove. But, the average price of a home in the capital is still £604,055.
Scotland, the North East, the North West and Yorkshire and the Humber all saw prices drop over two per cent in the last month, while prices also fell in the East Midlands, the East of England and Wales.
The South West and West Midlands were the only parts of the country to see prices increase in the past month, according to Rightmove’s latest findings. Prices in the sought after South West have risen over 6 per cent to £321,945 over the last year.
In its latest data set, the Office for National Statistics revealed that average property prices increased by 5.4 per cent in the year to October, up from 4.3 per cent in September, to stand at a record high of £245,000. This marked the highest annual growth rate Britain has seen since October 2016.
Islay Robinson, chief executive of Enness Global Mortgages, said: ‘The current market outlook is a positive one however we’re now starting to see lenders become far stricter where their lending criteria is concerned. This retraction has been largely focused on those with greater financial uncertainty due to the heavy reliance on commission or those classed as self-employed.
‘This will, of course, impact demand and the level of buyers looking to transact. However, given current backlogs, this is arguably a positive and will enable the regular market to catch its breath.’