Following the Chancellors Spring Budget in March 2021, we have gathered some information about the Budget's impact on the property market. The view is that the Budget has unlocked another spike in demand for properties which is very positive.
Some key stats shared by Zoopla (published 23 March 2021) are shown below:
Post-Budget spike in demand for housing
The Chancellor’s announcement of a stamp duty holiday extension and 95% mortgage guarantees created a 24% spike in buyer demand in England and Northern Ireland the days following the Budget, as more first-time buyers and movers entered the market.
Average buyer demand levels since the start of this year are running 13% higher than average levels across the whole of 2020.
The largest post-budget bounce in demand was for three-bed houses - this type of home attracts the most significant demand levels across the country. While there was a slight post-budget rise in supply, overall supply levels remain deeply constrained, with total supply this year down 13% vs the 2020 average.
As lockdowns ease and vaccinations continue to be rolled out, we expect more pent-up supply to come back to the market as vendors feel more comfortable opening their homes for viewing, albeit with the usual seasonal Easter dip.
The search for space continues
As described in our blog – Tenant's preferences regarding location –tenants are staying close to their preferred location but are looking for larger properties. This is due to a range of factors, including that it is anticipated that home working will continue for many post-lockdown.
Demand for homes is strongest in the most affordable parts of the housing market, boosting price growth. The annual rate of change in house prices is near decade-high levels in the Midlands and the North.
Continued demand for larger family homes as buyers look for more inside and outside space in the wake of multiple lockdowns puts upward pressure on the value of houses, especially as supply remains constrained.
Stamp Duty Holiday
The Chancellor’s announcement of a stamp duty holiday tapered extension means that hundreds of thousands more buyers will benefit from some level of stamp duty reprieve.
Allowing four months for completions after agreeing on sale means that most buyers now will be looking to benefit from the stamp duty holiday on the first £250,000 of their purchase by completing by the end of September, rather than the first £500,000, which means completion by the end of June.
Buyers in the North are in pole position to benefit from the tapered extension, with more than two-thirds of homes currently listed for sale at under £250,000 – attracting no stamp duty at all.
As such, we expect continued upward pressure on pricing in the North and Midlands as demand, which we had expected to be sustained even if the stamp duty holiday ended, is now further encouraged by the continued savings on offer.
If you plan to extend your property portfolio in Nottingham or Mansfield and would like some further information about the local property market, please contact us by calling 0115 704 3163 or 01623 277115. Alternatively, you can email us via our contact us page – click here.