Stamp duty break ignites property market

A "serious shortage" of homes for sale combined with huge demand from property buyers has created the strongest market for sellers in a decade.

 

Rightmove said a rise in asking prices has been fueled by there was now being the greatest excess of demand over supply for the past 10 years. The property website said sales had been agreed for almost two out of every three properties on the market and that the number of prospective buyers inquiring about available properties was at a record high, with 34 per cent more in February than in the same period last year.

 

A Rightmove spokesman commented that so many sales had been agreed in recent months the market now faced a "serious shortage" of homes available. He further said that concerns of a cliff edge for the housing market had dissipated, partly due to the tax holiday extension, but also because buyer demand caused by lockdowns had continued to surge.

 

Average asking prices rose to just over £321,000 last month, an increase of 0.8pc. The top end of the market fuelled the growth, with a monthly change to asking prices of 1.8 per cent, while those properties usually bought by first-time buyers rose by 0.3 per cent. Asking prices do not reflect the actual value of property, but rather reveal sellers' intentions and where the momentum sits in the market.

 

Analysts cancelled predictions of a fall in property values as a result of the extended stamp duty holiday announced in the Budget. Buyer demand was expected to collapse when the tax break ended this year, causing the property market to stagnate. The holiday, which removes stamp duty up to a threshold of £500,000, will be extended for three months until June 30, then a tapered rate of support, which will see the nil-band rate apply up to a threshold of £250,000, will be introduced for a further three months until September 30. Thereafter, the threshold for paying stamp duty will be reinstated at £125,000.

 

A prominent London Estate Agent, said: "This strong sellers' market is good news for those who are looking to put their home on the market as the traditional Easter selling season approaches. "The easing of lockdown restrictions and accelerated rollout of the vaccine are also persuading more homeowners to make properties available for sale in the traditionally busier spring market. This should bring more balance and help keep property prices in check."

 

 

PM Law 

Sheffield Property Solicitors