As the supply of properties falls in the wake of the stamp duty holiday, Azeem Salemohamed, of East London agent Sandra Davidson, considers the long-term implications for the housing market.
Two months since the stamp duty holiday ended for purchase up to £500,000, the latest property market statistics show some kind of normality beginning to kick in.
Using available stock figures for our East London patch from our partner Rightmove, we can see that there were 1,652 properties for sale in August 2020 – a time when the markets had reopened and the stamp duty holiday was in full swing. This August, the figure was 1,356, a drop of around 18%. New listings, however, are down by a much bigger margin – 30% (301 compared to 507)
These are interesting statistics. With supply falling, the next thing I want to ask is whether demand is still there? If you crudely gauge this from the number of people looking at property websites, the answer is yes.
Plenty of people are still on Rightmove hunting down, and looking in detail at, properties. There were 1.85 million detailed views of homes on our patch last month, a relatively small percentage fall from the 2 million views during the same month in 2020.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Our own experience bears this out. More people were viewing properties in 2021 in spite of the end of the tax break. Some of this is the result of people being vaccinated and more comfortable with physical viewings. But it also shows that demand is still there.
During the stamp duty holiday, people were willing to pay more for properties than they saved in tax – often because a higher asking price was funded through their mortgage, while the tax break provided a cash bonus. But as demand pushed up prices, and vendors’ expectations grew, the end of the holiday left buyers worse off; having to pay a premium, plus the stamp duty.
We are now at a point where activity is beginning to slow down and, with it, house prices. Fewer homes are coming on the market because second-time buyers are not finding enough properties at the levels they want. The effect is a return to a more realistic environment.
As prices stabilise, if you are selling, the key is choosing the right agent – one that will add value with strategies to maximise interest and achieve the best price. At Sandra Davidson, we are still selling properties, more than at this time than last year without the benefits of the stamp duty holiday and a lucrative market. So if you’re pondering a move, talk to us – we’d be delighted to offer a no-obligation market appraisal.
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