04 Aug Residential Property Review- July 2020
Our monthly property market review is intended to provide background to recent developments in property markets as well as to give an indication of how some key issues could impact in the future. We are not responsible or authorised to provide advice on investment decisions concerning property, only for the provision of mortgage advice. We hope you will find this review to be of interest.
UK HOUSING MARKET SHOWS INITIAL SIGNS OF RECOVERY
The number of prospective home buyers bounced back ‘noticeably’ in June, as did enquiries, agreed sales and instructions, according to the latest UK Residential Market Survey from the Royal Institution for Chartered Surveyors (RICS). While the impact of lockdown is clearly still being felt, with 12-month sale expectations remaining subdued against a ‘challenging economic backdrop’, the report certainly made for more positive reading than those of recent months. The survey also reported a boost in the number of properties being listed for sale, with a net balance of +42% of survey participants seeing an increase, rather than decrease, in listings. Meanwhile, pricing expectations also appear to have bounced back; while still in negative territory, a net balance of -12% of respondents believe that prices will fall over the next three months, as opposed to -43% in May.
NATIONWIDE TAX BREAKS
After the Chancellor’s announcement of a Stamp Duty holiday for England, Scotland followed suit with a Land and Buildings Transaction Tax (LBTT) holiday that will see the threshold temporarily rise from £145,000 to £250,000. The changes to LBTT will mean that an estimated 80% of buyers in Scotland will be exempt from the tax until 31 March 2021. The Welsh government also announced a Land Transaction Tax holiday which increases the threshold from £180,000 to £250,000. The new threshold will come into effect on 27 July to correspond with the full reopening of the housing market in Wales.
INCREASED DEMAND FOR NEW BUILDS POST-LOCKDOWN
Interest in newly built properties has surged by 66% since the reopening of the property market in May – higher than before lockdown began. Property website Zoopla recorded the jump in the six weeks following 13 May, the day the housing market reopened for business. The surge in demand, it said, was particularly strong among first-time buyers, with a 46% increase for this group. The increase has been attributed to two reasons. The first is that developers are used to providing virtual viewings when physical viewings aren’t possible. Secondly, the Help to Buy scheme can only be used when purchasing a new-build property.
HOMEOWNERS TO BENEFIT FROM £2BN GREEN HOMES GRANT
Property owners could benefit from grants to make their homes more energy efficient from September 2020. Announced on 8 July in the Chancellor’s Summer Economic Update, it comes as part of a £3bn plan to cut carbon emissions and meet sustainability targets. The Green Homes Grant will allow English homeowners to apply for vouchers, worth up to £10,000 for the lowest-income households and up to £5,000 for other households, to make energy efficiency improvements to their properties, such as wall or loft insulation, double glazing and low-energy lighting. The Chancellor suggested that the initiative could save households up to £300 per year on their energy bills.
All details are correct at the time of writing (21 July 2020)
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
If you have any queries, please contact the team at Howard Mortgages on 01803 554455 or contact us here.
Your home may be repossessed if you do not keep up repayments on your mortgage.