I was asked the other day by a prospective buyer whether they should abandon their goal to move house this Autumn and recommence their plan in the New Year. It took me a split-second to give them 5-reasons to think more positively about pursuing their new home…
1. STAMP DUTY HOLIDAY
The Chancellor’s stamp duty holiday finishes on 31st March 2021. A new purchase before the deadline with a purchase price of £500,000 will save a family £15,000 in tax. You need to complete the purchase before the deadline therefore now is the time to put your existing house on the market and find your next home.
2. LOW INTEREST RATES
Mortgage deals have never been as good as they are today since I started in this industry in 1979. 5-year fixed rate deals are excellent, as are the many discounted deals on offer from lenders. The better deals require a larger deposit, but it’s important to secure a deal now, to move house, as these rates will not stay at this level for ever. Especially if/when the pandemic ends!
3. DEMAND LIKELY TO INCREASE WHEN A VACCINE IS FOUND
Since March 2020 we have seen demand for property limited to those with secure employment. And a significant number of buyers stopped calling us, by and large those who were furloughed in the hospitality, airline, tourism and retail industries. While demand from this profile of buyer diminished, it rose overall in the past 6 months, with property prices continuing to rise in North West Leeds, albeit only by a small percentage.
Assuming a vaccine is developed, (and deployed quickly) I expect the industries impacted badly by the virus will restart rapidly and unemployment to return to pre-pandemic levels. This will re-establish job security and therefore, an increase in housing demand. With little new-build to satisfy the increased demand, any resurgence of demand in the second-hand market will drive prices even higher.
Moral of the story? Move now, before any possible surge in property prices.
4. CHRISTMAS IS RIGHTMOVE’S BUSIEST TIME OF YEAR
From a buyer’s perspective, now is a great time to purchase a new home. Statistics from Rightmove show Christmas and Boxing Day experience a huge surge in online activity in the housing market. Families often realise over the festive period that they need more space, or they agree that a New Year resolution is going to be moving to a bigger house, or they simply spend more time browsing the market and see the house of their dreams. This all inevitably leads to a surge in buyer demand from January onwards.
The period leading up to Christmas traditionally sees a downturn in demand in estate agencies, as the nights draw in, and people’s attention is diverted to Bonfire Night, Halloween and the usual Christmas parties and present buying. But this year may be different. With the pandemic curtailing entertainment and hospitality, there will inevitably be a reduction in people looking to move house this Autumn period, meaning less competition for buyers!
5. GOOD LONG-TERM INVESTMENT
In my view there is never a bad time to buy a new home. Property is always a good, long-term, investment. There’s been speculation that the pandemic and the expected rise in unemployment is going to drive property prices down. I’ve worked through three major recessions and every time the press speculated property prices would and never recover – and every time they’ve been wrong. The last price fall was following the banking crisis in 2008; by 2018 prices had not only recovered, but were ahead of the pre-recession levels. And they’ve continued to rise in the two years since.
I’m not convinced the prices of family homes will fall in cities such as Leeds. If they do, it will be short-lived and I would expect a quick recovery. With a low-rate mortgage on a property you’d be happy to live in for at least a few years, if not forever, I firmly believe you can’t go wrong with ‘bricks and mortar’.