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Long-term stimulus needed to bring the housing market to life

Long-term stimulus is needed to bring the housing market fully to life, and avoid short-term peaks and troughs, according to Robert Burdett, managing director of James Leigh property Management.

Burdett believes that the stamp duty holiday is an unprecedented and very welcome shot in the arm for the housing market when it was desperately needed.

However, he said: “But with lockdown now easing and COVID-19 firmly in retreat, now is the perfect opportunity to be looking at how the housing market can be built on firmer foundations than it has previously enjoyed.

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“The introduction of the 95% mortgage is a welcome move for first-time buyers, but more needs to be done to ensure the whole market can enjoy a stable future.”

Lending criteria currently prevent some buyers from accessing mortgage finance because on paper their income is not high enough to meet the lender’s criteria for income, even though they may be paying more in rent than they would be for a mortgage.

Data released by Estate Agency firm Keller Williams show the changing pattern of where people want to live, and the outdoors features strongly in the research.

Burdett said: “The research published by Keller Williams shows that the COVID-19 pandemic has changed the way people are thinking about the homes they want to buy.

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“Working from home in particular means that people are not as reliant on access to the cities, and so can buy where they want to live rather than where they need to access work.”

Support for the housing market for the long term could include a continuation of the Help to Buy scheme and reform to the mortgage industry so that affordability reflects current household expenditure.

Burdett added: “In the end, the housing market needs measures in place that will flatten the bumps in the road and create a sustainable future market.

“If the stamp duty holiday has taught us anything, it’s that short terms measures whilst useful at the time, do nothing for longer-term stability and growth.”

By Jake Carter

Source: Mortgage Introducer

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Stamp duty extension sees the property sales spike in March

The extension of the stamp duty holiday saw the property sales market spike in March with the renewed momentum looking likely to be sustained over the near term, the latest RICS Residential Market Survey has found.

The survey posted the strongest results in some months and those surveyed anticipated a busy three months ahead for the market.

Indeed, the month saw agreed sales hit the strongest level since August 2020 whilst new buyer enquiries were at a high last seen in September 2020.

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The report read: “The March 2021 RICS UK Residential Survey results show sales market activity picking up sharply over the month, with indicators on enquiries, sales and new instructions all improving noticeably compared to last time out.

“Survey participants highlight the extension of the stamp duty holiday as a significant driving force behind this renewed momentum, while a gradual loosening in lockdown restrictions is also said to be contributing to the rise in activity.”

Nigel Purves, CEO of Wayhome, added: “Demand clearly continued to outstrip supply in March, with a net balance of +59% of respondents citing a rise in house prices across the country.

“New buyer enquiries rose +42% – the strongest return since September 2020 and sales also spiked last month. This helped create a constant drumbeat of activity as we edged closer to the start of the traditionally busier springtime period.

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“While we are seeing a new-found confidence among many buyers and sellers, sadly this just isn’t the case for a large proportion of aspiring homeowners across the UK.

“Even with the stamp duty extension for an extra three months spurring on hopeful home buyers, there are many who find themselves overlooked and ignored due to their household income not meeting a mortgage lender’s criteria.

“This is despite them already having a deposit saved and being able to afford the equivalent of mortgage repayments in rent each month. More needs to be done to level the playing field and provide people with alternative routes into homeownership.”

By Ryan Fowler

Source: Mortgage Introducer

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40% of FTBs in the UK have taken advantage of the stamp duty holiday

New research by regulated property buyers GoodMove has revealed that 39% of first-time buyers in the UK have taken advantage of the stamp duty holiday, and a further 8% have not yet bought a home but are planning on using the stamp duty holiday extension to do so.

Those aged 25-44 are most likely to have taken advantage of the stamp duty holiday in the past year at 42%, and 18–24-year-olds are most likely to say they either haven’t taken advantage of Stamp Duty when they bought their home (50%) and say they won’t take advantage of the holiday in the future (10%).

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House prices and deposits are at an all-time high now, with first-time buyers now requiring up to 20% of a property’s value for a deposit. GoodMove’s research found that most (53%) have saved for a house deposit by themselves, with a further 34% having help from their parents or other family members to secure a deposit.

Over a quarter (28%) of people have received money for their deposit through inheritance, 11% of Brits have taken out a loan to help them buy a home and 10% have received help from government schemes. Nearly one in ten (8%) said they have won a lot of money in the past and this helped them secure a house deposit.

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When asked what the most complicated part of the home buying process was, the top reasons were saving up for a deposit (33%), finding a good mortgage deal (32%) and the mortgage application process (28%). Just 2% of respondents didn’t think any part of the process was difficult or complicated.

Nima Ghasri, director at GoodMove, said: “First-time buyers generally have the hardest time buying a home, with securing a deposit and mortgage approvals among the hardest part of getting on the property ladder. In this campaign, we wanted to see exactly how first-time buyers and those looking to buy a home in the immediate future have bought their home and secured their deposit as well as what they found the hardest part to be.

“It’s great to see so many first-time buyers taking advantage of government schemes and also securing deposits by themselves and proves to us that the property market isn’t all that bad for first-time buyers and people can get onto the property ladder!”

Source: Property Wire

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House Purchase Lending In Q4 At 13-year High

House purchase lending in Q4 2020 reached its highest quarterly level since 2007, UK Finance’s household finance review has found.

With buy-to-let Q4 2020 saw the highest purchase activity since Q1 2016.

In December lending levels were 31% higher than the same month a year earlier.

Eric Leenders, managing director, personal finance at UK Finance, said: “Homebuyers looking to take advantage of the stamp duty holiday were behind the housing market’s strongest quarter for purchases in 13 years, in the final quarter of 2020.

“The stamp duty holiday helped to boost activity at the end of 2020, and it is likely many of these purchases have been brought forward in order to take advantage of the savings.

“The Chancellor’s announcement in the Budget to extend the Stamp Duty holiday until the end of June before then phasing it out will prevent a cliff edge, reducing the risk of house sales collapsing and will prove beneficial for all parties involved in the housing market.”

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Despite the strong end of the year, annual purchases for the whole year were around a tenth lower than the previous year, due to a complete shutdown of the market in the first lockdown.

Richard Pike, Phoebus Software sales and marketing director, said: “The housing market, like many things, is more than the sum of its parts and, with the overall picture painted by these figures from UK Finance, it is evident that the number of mortgage approvals is only part of the story.

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“The stamp duty holiday obviously did as it was intended, stimulating the market in difficult circumstances. It has also created increased demand in a market where there isn’t enough property to meet that demand, which in turn is pushing prices up across the country.

“With many transactions in the pipeline the extension to the SDLT holiday, announced in the Budget yesterday, will go some way to ensuring that more of these complete before the new deadline.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Stamp duty holiday to be extended by three months

The stamp duty holiday will be extended by three months to the end of the June, The Times reports.

While it was reported that ministers would opt for a six-week extension for those already in the process of buying a house, mortgage lenders apparently told ministers this would not be long enough to stop sales falling through.

It seems likely the extension will just be for those already in the process of buying a house, or who have received a mortgage offer by a particular date.

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An announcement on stamp duty will likely be made when Chancellor Rishi Sunak delivers his budget on March 3rd.

Rob Houghton, chief executive of reallymoving, said: “This policy has been critical in keeping the housing market moving through the pandemic but I would urge the government to restrict this extension to buyers already in the conveyancing process – so those who have had their offer accepted and appointed a solicitor to undertake the conveyancing work.

“This gives buyers who began their homebuying journey in good time but have been subject to delays, a new window to complete.

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“While the holiday has been helpful for second steppers and those higher up the ladder, it has also caused prices to rise dramatically over the last year at the expense of first-time buyers.

“They have faced greater competition for homes, price increases and a restricted mortgage market – which led to a 12% fall in the proportion of first-time buyers in the market in the second half of 2020.

“Encouraging a new rush of buyers into the market could once again have a detrimental effect on first-time buyer share which has recovered strongly since the start of the year, back up to 58% of transactions from a low of 46% last September.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House prices record surprise jump despite looming stamp duty deadline

UK house prices recorded a surprise jump this month as buyers were undeterred by the looming stamp duty holiday deadline.

After three consecutive monthly falls the average price of property coming to market increased 0.5 per cent – or £1,511 – this month.

The number of new buyers has continued to grow despite the fact that it is now too late for most to beat the stamp duty deadline of 31 March.

Meanwhile, one in five buyers who agreed a purchase in July last year have still not completed, with an estimated 100,000 buyers still likely to miss out on their expected tax saving, according to Rightmove data.

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High demand is also outstripping supply and pushing up house prices. New seller numbers are down 21 per cent on the previous year as family home owners delay coming to the market, with experts suggesting it could be due to homeschooling distractions.

Tim Bannister, Rightmove’s director of property data, said: “Last year the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs.

“We may well be seeing a continuation of that this year. Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’.

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“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure. These are strong signs that new buyer demand is not facing a cliff-edge after the 31st of March.

“It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.”

By Jessica Clark

Source: City AM

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BTL Landlords to build portfolios beyond 31 March

Buy To Let landlords are undeterred by the looming stamp duty holiday deadline and intend to continue purchasing rental properties beyond 31 March, a survey by Foundation Home Loans has revealed.

Research by the intermediary-only specialist lender has revealed of the 16% of landlords who said they were going to purchase over the next 12 months, 48% said they would do so in Q1, 41% in Q2, 28% in Q3, and 29% in Q4.

Landlords were able to pick more than one quarter if they were unsure when they might complete.

The landlord research – undertaken by BVA BDRC and carried out between December and January with the results based on 846 online interviews – also found landlords seemed confident about their ability to complete purchases before the deadline. Only 14% said they would abort their transaction if completion did not look achievable.

Of those landlords intending to purchase in Q1, 65% said they were very or quite confident they would complete by the 31 March.

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Extending the deadline

When asked whether they believed the government would extend the deadline, 28% said yes, while 31% disagreed, although the questions were asked before the recent Parliamentary debate on the stamp duty holiday.

There has been growing industry support for a tapering of the deadline to allow those already within the purchase process to complete beyond the deadline date but still secure the tax saving.

Only 4% of those surveyed said they were purchasing because of the availability of the stamp duty holiday. Meanwhile, 25% of those intending to purchase in 2021 said they were holding off buying as they believed property prices were currently inflated.

The most recent house price index from Nationwide for January revealed that prices had dropped slightly by 0.3% month-on-month, and annual house price growth had slowed from 7.3% to 6.4%.

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Foundation’s research suggests landlords will look at slight house price drops throughout the year as an opportunity to add to portfolios.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.

“There are a number of positive results to come out of our exclusive research, not least landlords’ continued intention to keep on purchasing after the deadline has passed, and the news that many landlords will not abort their transactions if there is no extension and they look unlikely to complete by the 31 March.

“In that regard, the next month-and-a-half are very important for the sector. Foundation has put in place significant extra resources to our completions team in order to ensure we can complete as many cases as possible by the end of March.

“Looking beyond Q1, there will clearly be ongoing opportunities for advisers active in the landlord borrower space, and all the signals point to significant activity taking place in both the purchase and remortgage sectors.

“We should not forget that many landlords’ special rates are coming to an end over the months ahead, especially those that bought prior to the last stamp duty surcharge increase for additional homeowners back in Q1 2016.”

Foundation relaunched its entire buy-to-let product range last month, with rate reductions across the board, and last week launched new Limited Edition two-and five-year fixed rates with reduced fees for those landlords purchasing or remortgaging via a limited company vehicle.

Source: Mortgage Finance Gazette

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Stamp duty holiday extension to be debated in parliament

The government will be forced to debate the stamp duty holiday, after more than 115,000 people signed a petition calling for an extension.

Rightmove has estimated that, as it stands, more than 100,000 people will miss out on the stamp duty holiday, seeing as the market is movingly more slowly than usual.

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The stamp duty holiday means that people don’t have to pay stamp duty on the first £500,000 of a property purchase, saving up to £15,000.

Any petition signed by more than 100,000 is obliged to be debated in parliament.

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The government has previous said that it has no plans to extend the holiday.

It responded on the 10th December: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The government does not plan to extend this temporary relief.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House hunters race to beat stamp duty deadline

In the Chancellor’s spending review yesterday, it was revealed that the stamp duty holiday would not be extended and will come to an end on 31 March next year. New data from online mortgage broker Trussle shows where in the UK house hunters can still begin a property purchase and make the stamp duty deadline.

These areas include West Midlands, South West and North East.

The median number of days from starting a mortgage application to completing a property purchase is around 115 days.

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This means that the 6 December 2020 marks 115 days before the stamp duty holiday deadline.

As a result of the coronavirus pandemic, there have been significant delays to mortgage applications and the average time from mortgage submission to approval has increased by 50% since this time last year (from 16 days to 24 days).

The data by Trussle also shows that average time from application to completion differs by property type depending on detached, semi-detached, terraced or flat.

Currently they are faster in Scotland and the South East and slower in the East Midlands and East of England.

According to the data, flats take an average of 120 days to complete whilst semi-detached properties take 108 days on average.

Trussle has also identified the top five fastest lenders in the UK based on its data, finding that on average lenders take around 20 days to approve new mortgage submissions.

These lenders were Barclays (10 days), Halifax (14.5 days), BM Solutions (17 days), Coventry Building Society (18 days) and HSBC (19 days).

The time to approve mortgages has increased significantly since the start of the coronavirus pandemic.

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The average was closer to 10 days in 2019 and up until June 2020.

Miles Robinson, head of mortgages at Trussle, said: “The stamp duty holiday deadline is looming, which is understandably causing concern.

“There are delays across the market and we are urging buyers not to delay their mortgage application if they want to take advantage of the stamp duty holiday before the holiday ends on the 31 March next year.

“We hope that this guidance provides helpful timelines for those in different regions across the UK.

“We must also advise that those looking to buy a new home should make sure they budget enough to pay the stamp duty land tax, just in case the purchase does not complete before the deadline.

“If a buyer were to pull out after they’ve already exchanged, sellers may be in a position to sue for consequential loss at this point, and buyers may lose their deposits.

“This is going to cause a lot of stress and uncertainty for customers over the coming months, and we’re urging all buyers to take the necessary preparations.”

By Jessica Nangle

Source: Mortgage Introducer

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Property viewings up 30% in July

Property instructions and viewings were up in July following the stamp duty holiday, according to data published by property group Andrews.

Viewings saw a monthly increase of 29% in July, with physical viewings up 45% as buyers returned to the market. There were almost 6,000 viewings in July compared to just 20 in April, with a third of those viewings still being carried out virtually. Offers made and accepted by sellers were also up 12% in July. Instructions were up by more than a fifth (22%) from June, with valuations up by a third.

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David Westgate, group chief executive at Andrews Property Group, said: “What a difference four months makes. In April viewings and instructions across the industry fell off a cliff as the country was gripped by coronavirus and the Government asked us to stay at home. But the rebound has been swift as lockdown eased and the Chancellor’s stamp duty announcement at the start of July gave the market a timely boost.

“Buyers and sellers alike have shown renewed vigour in the past six weeks. With a lengthy window of opportunity to purchase before the stamp holiday comes to an end, we expect buyer activity to remain buoyant over the coming months. And we saw an immediate uplift in valuations and instructions since stamp duty was frozen, with sellers keen to take advantage of motivated buyers and more confidence to list thanks to stable house prices.

“It won’t be all plain sailing from here, but the Government has shown how important it sees a healthy and stable property market for the general wellbeing of the overall economy. And house prices have proven to be extremely resilient in the past when faced by strong economic headwinds, which suggests the market is well placed to cope with some potentially heavy bumps in the road ahead.”

Source: Property Wire