I don’t think anybody expected back in March for the property market to be going as strong as it currently is today, there is no way I would have predicted that we would be in a mini-boom with the prices in The Lake District increasing and a bun fight over property.
From the moment the market and unlocked back in May 2020 the pent-up demand from lockdown caused an increase in activity year-on-year throughout the UK. We have seen an increase in prices with a low supply and increasing demand especially so in The Lake District.
In 2021 Q1 we are seeing a rush of people trying to make the stamp duty deadline as it stands at this moment in time the stamp duty deadline has not been extended, there are many debates over what should happen with regards to this date and I don’t believe anybody feels that it should be left to drop off a cliff edge at the end of March. A cliff-edge situation would potentially cause issues within the conveyancing process and potentially aborted sales if these cannot be renegotiated through the chain.
My personal preference would be a stepped reduction in the saving as I feel a cliff edge ending would be unfair as there are many external factors influencing the buying process and how quickly it can be handled, however, there is then a debate over whether the stamp duty should continue for a further 12 months although some would argue that the increase in the price of property means you are not making a stamp duty saving at all as you are paying more for the property in the first place.
The demand we are seeing at the moment is driven by the stamp duty holiday coming to an end but I would also add a lot of people are re-evaluating their lives and how they choose to live. I’ve heard it said that a healthy pension pot is no good if you are not here to enjoy it, people are feeling the need to live their lives at this moment and enjoy their money. Buyers are choosing the quality of life over financial savings and pensions. As well as this more flexibility has become possible due to home working. Therefore a lot of people are choosing to live in the here and now and relocating to many parts of the UK including The Lake District.
Fine and country recently conducted a survey and found that their buyer’s priorities had changed they saw 40% of buyers were prioritizing a home office or study space, 46% prioritized good broadband signal and 39% prioritized gardens. The property portals have also mirrored this by reporting an increase in searches for 3,4 and 5 bedroomed properties. They have also reported home office, study space, and gardens as been reportedly higher over the last 9 months.
We are also starting to see mortgage companies offering a higher loan to value with lower deposits and the lending for mortgages has become slightly more flexible than it was back in October, it is worth noting that their policies have changed on their lending criteria and some do take into consideration not only your income but if you are on furlough and some are taking into consideration the type of company and industry you work in.
In the Lake District if we look at the maximum saving that can be made on stamp duty it is £15,000. When most people are looking at properties up to and over £1 million with negotiation the stamp duty saving does fall to be almost insignificant in the grand scheme of things. In my experience, we may see a little quiet patch just after the stamp duty finishes if it still is in March, followed by picking up again generally around May time with people hoping to obtain homes in The Lake District before the end of summer.
As it stands at this moment in time Q1 is set to be buoyant due to the number of people trying to get through to the deadline of the 31st of March this will inevitably push the figures up for this time of year. Zoopla suggests it expects things to continue as they for the rest of Q1 and Q2. However, changes are due later this year in relation to a stamp-duty reform, council tax reform, and capital gains so It’s unclear at this stage what effect this will then have on the housing market in the UK. With the wealth involved in The Lake District and looking at the market here over the last 10 years, I expect a very similar pattern to what we have experienced over the last 12 months in that the volume of property coming to the market will remain low but the demand will stay high meaning the majority of house prices will stay steady but with a potential increase on any desirable investment properties.
Gemma – Lake District Relocation