Has a Demand for Homes Reached Its Peak?
The record-breaking rise in property prices and demand for homes continuing to outstrip supply, are in their “final peak”, according to Kate Bould, MD of Index West Midlands.
Bould said: “Recent data has shown an average 10.5% rise in national property prices, with even higher numbers in several regions including 15.6% in the West Midlands. Demand has outstripped supply in most parts of the UK housing market this year, and this will continue until the Stamp Duty Land Tax (SDLT) holiday comes to an end on the 30 September. But whilst this growth in property values is slowing, the price of individual homes is going up – with many desperate to complete before the end of September and benefit from the £250,000 tax-free threshold, we know of many properties – particularly those with outside space and flexibility for working from home – that have been the subject of bidding wars between prospective buyers, resulting in even higher purchase prices being agreed. Consumer confidence is building, and with the current low mortgage rates, and the 30 September SDLT deadline, I believe the current peak in transaction activity will continue for the next few weeks.”
Demand remains high in the prestige property market, says Bould: “The luxury high value property segment of the market, made-up of homes selling for £1.5million plus, remains stable, especially amongst homebuyers with the desire to escape the city or suburbs.”
She added: “From 1 October, when the country passes this housing market transaction peak, things are likely to settle down. The property sector should brace itself for the impact of the end of the Furlough scheme financial support, offices re-opening, and hybrid working models bedding-in – as well as if the country is forced into another Covid lockdown.”
The stamp duty land tax rate returns to its normal limit of £125,000 from 1 October 2021.
Index West Midlands provides conveyancing searches, reports and property transaction solutions such as environmental risk factors, HS2, utility and telecommunications reports, for commercial and residential property lawyers, real estate and agriculture lawyers. It operates across Warwickshire, Worcestershire, Herefordshire, Shropshire, Staffordshire, and the Black Country.