Thanks in part to pent up demand, but also to a booming housing market, there has been a significant and noticeable surge in people buying and selling properties over the course of the second half of 2020 and the first few weeks of this year too.
Due to lockdown restrictions imposed up to May 2020 there was an expected bounce through the summer but that carried on far beyond expectations and through to the end of the year with a number of theories as to why it sustained so long.
First and foremost was the fact that people have spent an unusually long time stuck at home and this put their living situation in stark focus in terms of space and facilities.
Secondly most that remained in work had a fairly substantial increase in disposable income thanks to no commuting costs into work and not as much to spend money on, with many outlets reporting that much of this was going into clearing household debt, namely mortgages. This meant, in turn, that it sped up many people’s plans for upscaling their properties.
Thirdly, but perhaps most significantly, the government have been offering a number of tax incentives to stimulate the market but these are set to come to an end soon, and this could cause some issues for those currently caught in the process under lockdown.
Stamp duty break
With many facing issues with chains breaking down or lockdown related restrictions, the deadline for the stamp duty holiday on 31st March is now fast approaching and there could be many who don’t make the cut off.
As reported in The Guardian, “Rightmove said its latest analysis showed that it was taking 126 days – or just over four months – from the time an offer was accepted until legal completion. It estimates that 613,000 property sales agreed in 2020 are “stuck in the processing logjam” and awaiting legal completion.”
Now isn’t the time to buy
With this in mind, if you’ve been considering buying recently then now probably isn’t the time to get into the process as unexpected tax bills could be landing on buyer’s doors of up to £15,000 if they don’t make the cut off.
With the economy slowly opening back up and landlords in a much stronger position and more property coming to market, it’s much likelier that you’ll be able to rent for a little longer at a good rate and get access to a better property if you wait.
Although there’s always temptation to overstretch yourself in looking to purchase a property there’s many benefits to waiting and continuing to rent through this year and either save up even more or save on the costs of a potentially large tax bill and maintenance costs.
There is the other matter that this year will likely see many across the country seek to enjoy more leisure time with the easing of restrictions meaning that the country might go a little nuts enjoying their freedom, and that’s likely to take up some disposable income in the short-term.
Each person’s situation is different, but if you’re considering buying at the moment, it could be advisable to hold off.