Welcome to April 2021 and, for those who may have forgotten about the stamp duty deadline, we have passed what was originally the deadline for the stamp duty holiday.
As most people spent a lot of time fretting leading up to this period before the extension was made, we at Joules estate agents in Stockport thought it would be interesting to take a look at how the housing market is performing over this original deadline period.
Drop and Inflation
According to Nationwide, annual house price growth has remained strong but has seen a significant slowing, with a 0.2 per cent drop in prices on average during March.
This means that the annual house price inflation rate is at 5.7 per cent. However, despite the relatively small drop, an increase in UK housing prices have averaged over £1k per month over the last year to the tune of £232,134.
End of the Boom?
What most people are left wondering at this moment is if this light dip in house prices signals an end to the current boom period, or merely that the market is experiencing a pause. As mentioned, this is around the original end date of the stamp duty holiday and Help To Buy, which was deemed as quite the influence on increased buyer activity.
A reflection of the softening demand ahead of the first stamp duty holiday deadline, prior to the Chancellor announcing the extension in the budget resulting in March’s slowdown could be a probable cause. However, the recent economic resilience, mixed with furlough scheme extension and the mortgage guarantee scheme, showcase that the housing market looks strong for the foreseeable six months ahead.
Though the longer outlook still retains an aura of uncertainty, there are many who feel recovery will continue to gain momentum and shifts in housing demand following the pandemic will elevate the market going onwards. Others feel that weakening labour markets towards the end of the year following policy support withdrawal could see slowing towards the end of 2021.
The general feeling is that the end is not necessarily nigh for the current boom period, as the figures more resemble a market pause due to many believing the original stamp duty deadline was impossible to meet due to backlog. The following holiday extension and vaccine rollout re-energised many buyers, including first-time buyers to jump onto the bandwagon and get things moving. Despite the slowing of March, the period still records as the eighth highest for average prices since July.
With the start of sunnier weather now upon us, activity is expected to see a resurgence as families begin to once again desire more spacious living, and expecting a small surge in properties throughout April as people begin to desire more garden space.
Now with the 95 per cent mortgage scheme in full swing, an extra dangling carrot for those who have never been able to buy a home previously, we expect to witness sellers and buyers flock to take full advantage of the hotter months ahead.