The UK property market was booming throughout 2021, even though the country was ‘locked down’ for a large part of the year – and there are plenty of signs that this will continue over the next few months. Here Paul Anderson, who provides full building surveys in Ipswich, and across Suffolk, Essex, Kent and parts of London, looks at what the phrase ‘seller’s market’ means in practical terms – and why it is important people continue to pay for high-quality property surveys from qualified professionals.
Initially the property market suffered, along with many other industries, in the first national lockdown announced in March 2020. However, the Chancellor of the Exchequer, Rishi Sunak, in a bid to kick-start the economy, announced the so-called ‘stamp duty holiday’. This meant that buyers didn’t have to pay any tax (the actual amount of which varies depending on the purchase price) on any homes valued at £500,000 or under.
Gradually this incentive was reduced over time and currently stamp duty is payable on any homes valued at £125,000 or more. This is the same level as it was before the pandemic restrictions were introduced. However, it had the intended effect – to encourage more people to move or buy their first home.
The increased demand for homes wasn’t solely down to the stamp duty holiday. Other Government incentives, such as the ‘Help to Buy’ scheme, also helped to encourage more people onto the market. With ‘Help to Buy’, the Government provided financial incentives to first time buyers in the form of loans (which are interest-free for the first five years) and mortgage guarantees.
There were also other factors in play relating to the coronavirus itself. Restrictions in the construction sector meant not as many new homes were being built. The Government reported that the number of new house ‘completions’ was down by 25% in the first half of 2020-21, compared to the same period in 2019-20, while 38% fewer housing projects were started.
Many existing homeowners were looking to move as well. The requirement to work from home meant properties with more space and a garden – rather than something smaller which was closer to the office or workplace – were a lot more desirable. All of this meant not only was demand up, but supply was down as well.
All of the above factors meant that in 2021 there were around 1.5million house purchases across the UK. According to the trade association UK Finance, last year was also the strongest year for mortgage lending since 2007, the year before the worldwide financial recession. In 2022, the UK housing market is still predicted to be busy, although not as inflated as in 2021. The continued move away from cities to the countryside will continue, believes James Thatch of UK Finance.
So, it is still very much a ‘seller’s market’ – put simply, there are more buyers than there are homes available. This often puts prices up and means sales can be completed much more quickly (particularly if there is no ongoing chain involved).
What Buyers Should Do
All of which puts more pressure on buyers to be quick off the mark if they see, or become aware of, a property they like. However, it is still vitally important to have a proper survey done if you are moving into somewhere new, as any extra bills for repairs to your new home will hit your finances extremely hard, particularly if the asking price is already high.
A report by a qualified chartered surveyors’ practice, such as Suffolk-based Anderson Associates, will reveal any faults and may help the buyer reduce the asking price, as well as giving you much-needed peace of mind as you prepare for a major investment.
Full Building Surveys in Ipswich from Anderson Associates
Anderson Associates recommend our full building surveys as these should identify any issues. These types of reports include a cost summary, which advises you on what repair and maintenance issues the property has and gives an indication as to the cost of these repairs.
You can reach us on 01473 623656 if you would like to learn more about any of our services, or follow this link and fill in the online form.