Estate agents are looking forward to the strongest December for the housing market in well over a decade, as demand continues to intensify as the stamp duty holiday deadline looms.
This report comes as record numbers of home loans were approved in October according to a report by Zoopla, as a growing number of people seek to take advantage of the last few feasible months of the stamp duty reduction, scheduled to end in March 2021.
This demand has pushed UK house prices up by 3.5 per cent across the country, the highest rise in three years, according to Zoopla’s House Price Index.
More locally, Forest Hill estate agents have reported that the average house price has increased by over £32,000, an increase of 6.42 per cent, to £536,981.
This continued demand has led to calls by experts in the market to push back the deadline of the stamp duty holiday to allow sales to continue and to avoid the issues caused by increased demand, such as a logjam in the conveyancing system.
What Has Caused Continued Demand For Housing?
Initially, the demand in the housing market was primarily caused by pent-up demand. In the early days of the current circumstances, many estate agents were closed or adapting to new remote working environments, with the rules for moves and viewings initially unclear.
Once the housing market restarted, the reducting of stamp duty became a catalyst for increased demand. This meant that for houses worth under £500,000 no stamp duty at all needed to be paid so long as the sale was completed before 31st March 2021.
Whilst the changes in how many people lived and worked already caused them to consider their living environment, the stamp duty savings and the limited time they were available launched them into action, and the housing market has moved at an unprecedented rate throughout the summer.
The interesting part of this surge is that it has not stopped yet, and has not shown signs of significantly slowing down. The main temporary dip that was seen was for the first three working days of November, between the Halloween announcement of a second lockdown and the lockdown commencing.
Once clarity was received about whether estate agents could remain open, the rush in demand continued.
The peak is likely to be seen in January, which given the current expected time between an agreed sale and the sale completed is the last potentially feasible time for a sale to be made before the deadline.
Zoopla projects that 100,000 extra sales will complete before the end of March, with many negotiations coming close to the deadline.
One major complication comes from the sales process itself. Once a price is agreed on principle, conveyancing and other legal processes take place, and due to the increased demand and decreased capacity in local authorities and property law offices, there is a backlog of sales.
As the sale needs to be completed, not just agreed before the 31st March deadline, there will a scramble at the start of 2021 to complete every sale possible.