Supply and demand creates a sellers’ market!
Since the several initiatives, the government has announced, alongside existing homeowners evaluating their living situation since the first national lockdown, the property market has been thriving and is set to continue long after the Stamp Duty Holiday Scheme finishes on September 30th 2021.
When the Chancellor announcement introduced the Stamp Duty Holiday Scheme, the property market has thrived, not solely based on this, but in addition to other government initiatives, alongside the way companies look to operate in the near future.
After the first national lockdown, many homeowners evaluated their living situation due to lack of space when the entire family was at home. The Stamp Duty Holiday Scheme caused the property market to thrive, with many taking advantage to move to a new home. With the tax-free threshold of £500,000, the government still raised more money in Stamp Duty in 2020, raising a total of £2.06bn in the last three months of June 30th 2021, before the tax-free threshold being lowered to £250,000.
Existing homeowners overtook first-time buyers, who dominated the property market for over 7 years. The government soon realised this and introduced a new Help-To-Buy Scheme aimed at first-time buyers, alongside the introduction of the 95% mortgages.
The above incentives have meant that the property market is thriving and is set to continue to thrive for the foreseeable future. With this in mind, there is a supply shortage in the market, pushing up property prices to an all-time high. On average, it’s taking 26 days to sell a home, compared to an average of 49 days in 2019.
Companies have also helped fuel property prices up, with many looking to have their employees remote working from home or adopting the Hybrid model. The Hybrid model means that employees will work both from an office location and their home. Companies have had to adapt the several lockdowns, with many investing in infrastructure to support their employees working from home. The savings that have been made by downsizing or completely closing their office spaces, has meant that more employees are set to continue to work from home, causing more people to look for a new home to have a separate living and working space.
Lenders are have also seen a shift in the property market. Although lending criteria was tightened at the start of the pandemic, with many mortgage products withdrawn from the market, lenders are now more willing to offer mortgages to buyers, especially ones with smaller deposits.
First-time buyers have accounted for 30% of property sales this year, regaining some of the market share they lost.
With more people looking to purchase a property vs the available properties in the market, more buyers are bidding higher to buy their ideal home, pushing property prices up.
The property market is set to continue to thrive long after the Stamp Duty Holiday finishes, especially with the unbalanced supply and demand needs. Additional government incentives alongside the demand of more people searching for a home to meet their needs is adding to this unstable supply vs demand.
Whether you are looking to buy or sell your property, speak with one of our property professionals today by calling us on 0116 266 9977.
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