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It’s been an interesting year for the housing market, with impact from the coronavirus pandemic and numerous Government backed solutions to help people onto the property market. If you are wondering how these factors will affect you, what the housing market might look like in the next few years, or if it’s a good time to buy or sell, read our insights on the current housing market and predictions for the future. Is it a good time to buy or sell a house? Three developments in early March 2021 had a real impact in the sales market: The Chancellor’s announcement of the stamp duty extension His announcement of a 95% mortgage guarantee scheme  The end of home-schooling for many families as schools reopened The effects of these factors were a surge in buyer demand through March and into April, as more households decided to move, and the London property market in particular showed a 57% increase in the number of people looking to buy and a 21% increase in the number of tenants looking to move compared to February. (source: propertyindustryeye.com) As things currently stand, in June 2021 there is a current “imbalance between incipient demand and available supply of houses” according to the Bank of England’s Chief Economist, Andy Haldane. (source: The Guardian) For sellers, there is the benefit of the stamp duty extension if the plan is to sell up and buy another property and the rise in buyers looking to buy is a great chance to market your property, however demand is incredibly high, creating fierce competition. Rightmove reported that housing market demand was 52% higher in April 2021 compared to April 2019. And despite this increased demand, stock is still low, with Zoopla reporting a 21% decline in the year to mid-May compared to the 2020 average. (source: todaysconveyencer.co.uk) What will the housing market look like in 2022? Heading into 2022, it is expected that the level of buyer demand will remain higher than previous years. First-time buyers are also expected to be much more active in the market. As UK lockdown is likely to be long over, businesses will confirm how their working practices will operate in the coming years, providing people with more certainty over where they should live in relation to work. Office-based workers who now have a longer-term option for working from home will be able to look at property for sale in a far wider range of locations. Stronger house price growth is likely to return in 2022 supported by a period of sustained economic growth and a projected drop in unemployment by the end of this year. Housing market prediction for the next five years In 2020, UK house price growth increased by an average of 7.3%, despite the economy contracting by -10% (source: thisismoney.co.uk). Over the next five years as the rate of economic growth seen in late 2021/early 2022 will likely subside, house price growth is likely to follow suit, easing in the next few years. UK house prices are projected to increase by 4%, 3.5% and 3% in the next three years. Over the five years to 2025, prices are forecasted to rise by 21.1%. How fast are houses selling? The UK housing market has recorded £149 billion worth of property sales in the first 15 weeks of this year. That’s almost more than double the value of homes sold in the same period in 2020 and 2019. The current level of sales would not normally be seen until the end of June, meaning the current market is running around six weeks ahead of a typical year. Research also shows that one in every 50 homes listed for sale between 1st January and 15th April 2021 was sold. This is up from one in every 100 homes during the same period in 2020 (source: propertyreporter.co.uk). In Wales, the BBC reported that some homes were even being bought before a viewing, something which of course isn’t recommended. What locations are houses selling in? As the above BBC report states, Wales has seen the biggest house price growth in the UK, up by an average of 11% in the past year and is one of the areas where supply and demand are imbalanced. House price growth was 4% in March 2021, down from 4.5% recorded in January 2021. The latest data shows (as of May 2021) the top five busiest house sale markets are in Glasgow, Bristol, Nottingham, Stoke, and Middlesbrough. Manchester, Liverpool, Leeds, Nottingham, and Leicester are each registering house price growth in excess of 5% year-on-year. What kind of houses are selling? There is no doubt that the pandemic has changed buyers’ perspective on the type of property they want. An independent survey from Market Financial Solutions surveyed 1,282 UK-based homebuyers (those in the process of buying) and existing homeowners between 23rd and 27th April 2021. 34% said COVID-19 has changed their perspective on what they want and need from their main residence. 42% stated their views on where they wanted to live changed. 46% were keen on a flat or house with more space. In the first half of April 2021, the number of homes available to buy was 30% lower than the level recorded during the same period in 2017-19. The total number of homes listed for sale in the year to date is 19% lower than average levels recorded in 2020 even after the global pandemic saw a 50-day market closure in England (longer in Wales and Scotland) last year. Three and four-bedroom houses have been in highest demand as people look for more space and upsizing opportunities. Due to high demand from buyers, the supply of new homes has dropped significantly, bolstered perhaps by the 95% mortgage availability, and help to buy schemes on new builds. [H2] What is the average price houses are selling for? According to Rightmove, the average asking price reached a record high back in October 2020 when its data showed sellers asking for an average price of £323,530, an increase of £16,818 more than the previous year. In May 2021, the Nationwide House Price Index reported that the average house price was around £238,831, which was the fastest growth within a year for nearly seven years (source: The Financial times). Rightmove’s latest House Price Index for May 2021 reported a new record as the average price of property coming to market jumped by 1.8% (+£5,767), to a third of a million pounds (£333,564). The increase in demand from home buyers has put pressure on property values, with the number of homes sold for over asking price reaching the highest level since 2014. Data from NAEA Propertymark shows that 16% of properties sold for more than the asking price in March. No doubt this is influenced by the current stamp duty holiday. What should you do if you want to buy a house now? As we have shown, buyers are incredibly active on the market at present. The number of sales agreed reached the highest for the month of March since 2007, with an average of 13 buyers for every property on the market. This means you need to keep in touch with your estate agent to make sure you get to see the properties you want to buy. You may need to act quickly to secure your dream home as there’s a higher-than-average competition, but always make sure you are getting what you want and not simply settling. What should you do if you want to sell a house now? If you are ready to put your house on the market, get it valued and ready for sale. We have numerous guides on how to get it in the best shape to attract buyers, from if it’s the right time to sell to ways to add value to your home. How to buy and sell a house at the same time While it is always recommended to sell your property before buying a new one, many people buy and sell at the same time, entering into a chain. The best way to make sure buying and selling at the same time doesn’t become stressful or overly complicated is to keep up communication between your conveyancer and estate agent. Pop in to your local branch or give us a call and let us help.

From 1 October 2021, the tax holiday on stamp duty rates ended and home buyers in England and Northern Ireland are required to pay on all purchases above £125,000. Residents in Wales, where stamp duty is known as ‘land transaction tax’, are required to pay on purchases above £180,000 after their tax holiday finished 1 July 2021. What is stamp duty? When you purchase a property or land, you are required to pay a form of tax called Stamp Duty Land Tax (SDLT). The amount you pay can depend on the price of the property, the location of the property, whether you’re a first-time buyer or whether you’re a UK resident. What are the prices now? Those that are familiar with the tax rates pre-Covid will recognise the tiers as they return to their original percentages. This means that if you’ve bought a property in England or Northern Ireland from 1 October 2021, you’ll have to pay the following: Property or lease premium or transfer value SDLT Rate Up to £125,000 0% The next £125,000 (the portion from £125,001 to £250,000) 2% The next £675,000 (the portion from £250,001 to £925,000) 5% The next £575,000 (the portion from £925,001 to £1.5 million) 10% If you’ve bought a property in Wales from 1 July 2021, you’ll have to pay the following: Property or lease premium or transfer value SDLT Rate Up to £180,000 0% £180,001 to £250,000 3.5% £250,001 to £400,000 5% £400,001-£750,000 7.5% £750,001-£1.5m 10% £1.5m and above 12% John Phillips, National Operations Director, Spicerhaart and Just Mortgages said: “While the stamp duty holiday has definitely helped stimulate the market, it is by no means the driving force behind the current rush to buy, and once it ends, the market will continue to thrive. “The pandemic has certainly played an important role in this desire for houses. Without hospitality venues and holidays to spend on, those fortunate enough to stay in stable employment have saved at record levels. These increased savings have allowed people to consider moving to a bigger property, or a more desirable location. “What will impact the market more than the end of the stamp duty holiday, is the reopening of pubs, restaurants and international travel. Buying a house will still be a priority for many, but there will be lots of people booking holidays after a year stuck in the UK and savings may be spent on a few weeks in the sun.”

Help to Buy is a government initiative designed to help first-time buyers buy a home. However, some of the schemes also help people who have purchased a property before. A range of Help to Buy home ownership schemes are available in England, but there are some restrictions and rules for applying, and some schemes that were active may no longer be open. Here we provide an update of the different Help to Buy schemes and explain how they could work for you. What is Help-to-buy? There are a number of different Help to Buy schemes. Perhaps the most well-known are the Help to Buy ISA and Equity Loan schemes, but both of these are now closed. There is also a Shared Ownership scheme, loans to help you build a property and schemes specific to council and housing association tenants. What is a Help to Buy ISA? The Help to Buy ISA helped people save for their first home, with the Government topping up people’s savings by 25% (as long as there was more than £1600 in the ISA). While the Help to Buy ISA closed to new applicants in 2019, people who had set their Help to Buy ISA account up before 30th November 2019 can still make deposits until November 2029. The 25% deposit can be claimed until November 2030. The 25% bonus is activated when you buy your home. You should instruct your conveyancer to apply for the bonus at the time of your purchase. What is a Lifetime ISA? The Lifetime ISA replaced the Help to Buy ISA, and is in essence a similar scheme. It still has the 25% contribution from the Government, but with different restrictions. Applicants wanting to open a Lifetime ISA must be aged between 18 and 39, you can save up to £4,000 per year, and you must make your first payment before your 40th birthday. However, you can’t make any further payments or receive the 25% bonus after the age of 50. But your account will stay open and can earn interest after you turn 50. Other affordable home ownership schemes Shared ownership The Help to Buy Shared Ownership scheme gives you the chance to buy a share of a house and pay rent on the remaining share. If you can afford to, you can buy larger shares further down the line. Here are a few details about Shared Ownership: You can use Shared Ownership it you have a household income of £80,000 a year outside London or £90,000 within London Your share of the property can be between 25% and 75% of the property’s value You can be a first-time buyer, an existing shared owner wishing to move or use the scheme if you owned a home but cannot afford to buy a new one You can buy a new build or an existing property You will require a mortgage for your share of the purchase price or enough in savings to fund the purchase There are specific versions of Shared Ownership schemes available for people with disabilities and the over 55s Shared Ownership properties are always leasehold A loan towards the cost of building a home A Help to Build equity loan gives assistance to anyone who is building a home on land they are buying or already own. Applicants can receive between 5-20% of the land and building costs, up to a maximum of £600,000 (for both land and building costs) or £400,000 (if you already own the land you are building on). If you are building a home in London, your loan can be 40% of the total costs. New-build property equity loan A Help to Buy Equity Loan offered buyers up to 20% off the cost of a new build home. Buyers only needed to provide a 5% cash deposit with a Help to Buy Equity Loan, subject to eligibility, terms and conditions. However, this scheme closed to applicants in October 2022. Any home purchase made using a Help to Buy Equity Loan has to complete by 31st March 2023. Buying your council or housing association property People who live in council housing can use the Right to Buy scheme to help with buying their home. Public sector tenants can save up to 70% on the sale price under Right to Buy, and the discount increases the longer the prospective home buyer has been a council tenant. The criteria for houses are: 35% discount for people who have been tenants for 3-5 years For public sector tenants of more than five years, the discount goes up 1% for every further year of tenancy, up to a maximum of 70% or £87,200 in England (£116,200 in London) – whichever is lower The Right to Buy criteria for flats are: 50% discount for people who have been tenants for 3-5 years For public sector tenants of more than five years, the discount goes up 2% for every further year of tenancy, up to a maximum of 70% or £87,200 in England (£116,200 in London) – whichever is lower Under the Right to Acquire scheme, housing association tenants can receive a discount of between £9,000 - £16,000 on the sale price of their property. The discounts vary according to the unitary and county council area location of the property. You can apply to this scheme if you have had a public sector landlord for more than 3 years. These landlords can be housing associations, councils, the armed services or NHS trusts and foundation trusts. To be eligible, the property must have been built or bought by a housing association after 31st March 1997, or transferred from a local council to a housing association after the same date. How to apply for help-to-buy Applying for a Help to Buy scheme is quite straightforward. Speak to estate agents and developers selling new home stock with help to buy available. They'll often be able to recommend mortgage advisors who can guide you through the process. You can also look out for the Help to Buy logo on property developments. Let butters john bee help you find your next home We are dedicated to helping people buy a property. Contact butters john bee today to discuss your options.