We have been saturated in recent weeks with news relating to the UK property market. The Treasury’s response to the official petition requesting an extension of the stamp duty deadline sparked initial disappointment. Now, calls for an extension have been heightened as industry professionals look to Chancellor, Rishi Sunak, to amend the deadline. Other news showcased the return of high loan-to-value mortgage products, which have given hope to many people looking to buy. As the industry continues to run across all Tiers, many are considering what the industry will look like as we head into 2021.
The news that there are no plans from the government to extend the deadline was disappointing for the industry. With the market continuing to react to the news, many are urging the government to reconsider. Recent surveys show that almost a third of buyers will pull out of their transaction without the tax savings afforded by the stamp duty holiday. Fears that a sudden stop will create a ‘cliff-edge’ in the market are still being voiced. However, many suggest that a tapering of the deadline will help keep the market stable. Many are still looking to the Chancellor to help as many transactions complete in time as possible. The calls are expected to continue into the new year as we get closer to the 31 March deadline.
Mortgage brokers have welcomed the return of high loan-to-value deals to the UK property market. New products launched by lenders have helped to satisfy demand from buyers that was sparked by the first national lockdown. Many who felt they were unable to secure a mortgage due to a small deposit no longer feel pushed out of the market. Hope has been restored by the new accessibility to mortgage deals for many. Demand for housing is still high with more people looking to move following an extended time at home. The increased amount of high LTV products that have launched this month is a positive sign as we move into 2021.
The introduction of Tier 4 areas sent shockwaves through the country. People living in these areas are no longer able to socialise with other households. Leaving the house is permitted for reasonable means such as going to work, the shops, or moving house, to name a few. The news that moving home can still take place was well-received by the market. However, strict social distancing measures and PPE requirements must be met. Estate agents are still able to conduct viewings and removal firms may still enter premises. The Ministry of Housing, Communities and Local Government has also updated their guidance for agents following the Tier 4 announcement.
With the planned stamp duty deadline now only months away, concerns are growing for the market. Many are focused on protecting the transactions that are already underway, to reduce the potential risk from those that fall through because of the deadline. Keeping the market stable is key as we go into the new year. The introduction of new high loan-to-value mortgages is a great help to this. Although times remain uncertain, it is a positive sign that the market can remain open across all tiers. The Moving Hub’s Director, Oliver Meddick, shared his thoughts on the future of the market:
“While there is a massive focus on the stamp duty deadline, I can still see huge optimism in the marketplace, with lenders easing criteria and more increasing their loan-to-values. So, while many will feel the stamp duty deadline is an issue, in my opinion so many more are wanting lenders to allow them to buy, which will see a flood of buyers returning to the market. There is more long-term value in the ability to borrow money and buy the property you want in an upwards pointing market than the short-term gain of stamp duty relief.”
The Moving Hub is here to support you AND your clients throughout every transaction. We have a dedicated team of in-house advisors that will be able to answer your clients’ questions and guide them through the process. Contact us today to find out more about the support we offer!