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UK property market continues despite Second Lockdown

4th November 2020

The housing market ground to a halt during the first UK-wide lockdown, and worries of something similar happening resurfaced with news that a second lockdown will begin on 5 November 2020.

These concerns have been allayed somewhat by Robert Jenrick, Secretary of State for Housing, Communities and Local Government, who has confirmed that the government is allowing the UK housing market to continue operating.

In a tweet posted after the Prime Minister’s address to the nation on 31 October, Mr Jenrick wrote:

“Housing market update ahead of Thursday’s measures: Renters & homeowners will be able to move; Removal firms and estate agents can operate; Construction sites can and should continue; Tradespeople will be able to enter homes; But all must follow the Covid safety guidance.”

This message will come as a welcome relief to a sector undergoing a convincing recovery since re-starting in May with a surge in activity, driven in part, by the desire of buyers to complete transactions before the Stamp Duty Land Tax (SDLT) holiday ends on 31 March 2021.

The increase in activity has seen house prices in the UK hit a new record high of just over £227,000 on average; with figures from Nationwide Building Society showing annual house price growth reached a five-year-high in October, rising 0.8% month-on-month since January 2015.

The end to the current ‘Help to Buy’ scheme, which also closes on 31 March 2021, will also be driving a surge in activity across the sector as buyers try to benefit.  From April, only first-time buyers will be able to use the scheme, which will end completely by 2023.

Calls to extend the Stamp Duty Land Tax holiday

Chancellor Rishi Sunak raised the payment threshold on regular SDLT from £125,000 to £500,000 in England and Northern Ireland, presenting some buyers with the opportunity to save as much as £15,000.

The SDLT holiday will end on 31 March 2021, but leading industry figures are expressing concern that the home buying and selling industry lacks sufficient capacity to deal successfully with increasing demand, as the need for completions is concentrated into a limited period before the deadline.

Urging Government action, Kate Faulkner, Chair of the Home Buying and Selling Group, which represents the interests of businesses involved in the home moving process, last week wrote to the Chancellor and called for an extension to the SDLT holiday.

It was suggested the SDLT holiday be extended for 6 months, with notice given well before Christmas to help reduce the risk of transactions failing to complete by the deadline, which could cause chains to collapse as consumers struggle to find the necessary funds to pay the SDLT.

Faulkner also invited Sunak to work with the industry to develop a strategy that would help smooth the end of an extended SDLT holiday, rather than endure a similar pre-deadline rush later next year instead of now.

Like most property professionals we await the Chancellor’s response with interest – we will keep you updated if circumstances change.

In the meantime, the Residential Property team here at Ansons are on hand to discuss any property related matters.  Should you be considering a move, please contact our Head of Residential Conveyancing, Julie Tomasik on 0121 716 3732 or email jtomasik@ansonssolicitors.com

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