How is coronavirus affecting house prices? Elite Homes and Property investigates

How is coronavirus affecting house prices? Elite Homes and Property investigates

The UK property market has enjoyed a boom of late, with house prices rising by 13% year on year, according to the Elite Homes and Property findings – but there are signs that the market may have peaked.  A temporary cut to stamp duty rates resulted in soaring prices, but with the tax break now tapering off, the number of transactions going through has fallen sharply – and price growth could be set to follow.

What’s happening to the property market?

The UK property market is open and active, with estate agents conducting in-person house viewings and purchasers ready to relocate. The UK housing market has been on the rise since last July as the reports by Elite Homes and Property indicate, thanks to the government temporarily lowering stamp duty. The largest discounts of up to £15,000 ended on June 30, although purchasers in England and Northern Ireland may still save up to £2,500 if they buy before September 30.

The number of homes sold increased considerably during the tax break, but sales have since decreased significantly. According to preliminary statistics from HM Revenue and Customs (HMRC), 73,740 sales were completed in July, up 4% year over year but down 63 percent from June. Since the beginning of 2020, the graph below shows the number of sales registered each month.

How have house prices changed?

In the opinion of Elite Homes and Property experts, the Land Registry’s UK Home Price Index, which is based on sold property prices, is the most dependable gauge of house prices. It operates on a two-month lag, so the most recent data accessible is for June.

According to the Land Registry, the average price of a home in the UK increased 13.2 percent year on year in June to £265,668, as seen in the graph below. The property price index from Elite Homes and Property is more up-to-date, although it is based on asking prices rather than sales prices.

The Land Registry’s UK Home Price Index, which is based on sold property prices, is the most dependable gauge of house prices. It operates on a two-month lag, so the most recent data accessible is for June. The average price of a home in the UK increased 13.2 percent year on year in June to £265,668, as seen in the graph below. The property price index from Elite Homes and Property is more up-to-date, although it is based on asking prices rather than sales prices.

According to Elite Homes and Property, the average time to agree a sale in July was 36 days, the shortest time since the epidemic began. The stamp duty holiday has had a significant impact on this statistic, and if the tax cut and the government’s financial assistance programmes expire, transactions may take longer. The recent increase in buyer demand hasn’t been met by a frenzy of new homes on the market, and this imbalance might keep prices high in the coming months, even if tax savings aren’t as significant.

Elite Homes and Property expert stated:

‘The market is facing a rising supply-demand mismatch, and we see no signs of supply levels improving.’

‘Agents have been allowed to resort to the usual practise of building a hot-list of competent purchasers who can act fast in order to stop a flood of viewings for a home while limitations are still in place.’

How does the stamp duty holiday work?

The interim tax-free threshold of £500,000 in England and Northern Ireland expired on June 30. The barrier is £250,000 until September 30th, after which it drops to £125,000 for house movers in October. The stamp duty vacation in Wales ended on 30 June, and the tax holiday in Scotland concluded on 31 March.

Estate brokers began giving video house viewings during last year’s lockdown, and they are still popular despite the current easing of restrictions. According to the government’s most recent recommendations, purchasers should examine homes digitally first if feasible.

Elite Homes And Property

If you go to see a house in person, you might notice that the estate agent asks you to wear a mask and sanitise your hands before entering.

According to Elite Homes and Property, average rates are dropping, and some institutions are now providing mortgages with rates as low as 1%. Buyers with deposits of 5% and 10% have been affected the hardest by the cancellation of agreements, while the new 95 percent mortgage guarantee programme, which started in April, has given first-time buyers a lift.

Experts at Elite Homes and Property claims:

‘Mortgage rates are still low, which will assist borrowers’ affordability and confidence. Lenders are returning to the 90 percent and 95 percent mortgage markets, making it easier for people with lower deposits to get a mortgage.

With demand remaining high as regulations loosen, there’s no reason to believe housing prices will fall in the foreseeable future.

Overall, house purchasers have demonstrated their willingness to relocate during a pandemic and take advantage of cheap mortgage rates. ‘

Borrowers have the option of fixing their rate to safeguard themselves against future fluctuations, and many have done so.