Fri 07 Aug 2020
When the lockdown restrictions were first eased and our teams returned to the office, we predicted that we would witness an immediate spike in activity as the market restarted. Sure enough, buyers and tenants who had been waiting for the green light began to move, and as most of our clients had remained on the market throughout the lockdown, we were able to complete a high level of transactions in the first weeks after we reopened.
We were less certain on the long-term implications of the lockdown on the industry, however, as no similar event could be used as a comparison to predict how the market would recover. However, it has become apparent that market conditions are extremely favourable.
The government’s relaxation of Stamp Duty Land Tax has helped to increase buyer activity. After the threshold for paying the tax rose from £125,000 to £500,000 in early July, purchasing a property has become a lot more affordable – for example, a property bought for £500,000 would previously have incurred a £15,000 Stamp Duty bill, but is now exempt from the tax. This makes a difference especially in Brentford, where the average property price is £437,489, meaning that the average property is now completely exempt from Stamp Duty. This is encouraging more prospective buyers to come to the market.
The low interest rate has enabled these willing buyers to access more affordable mortgages easily, ensuring that they can take advantage of the Stamp Duty relief. As the Bank of England has recently elected to keep the base interest rate at its record-low 0.1%, there is still time for prospective buyers to take advantage of this affordable credit. If you are thinking of doing the same, you can read our guide on getting the right mortgage here.
These two factors have helped to boost confidence in the market, which has already been growing steadily since the industry resumed in May.
Immediately after the reopening, confidence was understandably low as buyers and sellers alike expressed concern about the safety of conducting viewings, but the industry has adapted in order to put all parties at ease.
In addition, as summer has progressed many individuals who had initially delayed buying or selling a property – waiting for the restrictions to be lifted completely – are now realising that social distancing measures will remain in place for the foreseeable future, and have come to the market. We have witnessed a similar pattern with the market after the EU Referendum: the market initially slowed down as people waited for a deal to be executed, but returned once it became clear that they would be waiting indefinitely for a resolution.
Consequently, the market is moving rapidly at present, as a combination of reduced Stamp Duty and low interest rates have provided the ideal conditions for large numbers of buyers to come to a market which has adapted to social distancing and is growing in confidence by the day.
If you are thinking of buying or selling a property, you can contact our sales team here.