Property Update

Lockdown has caused some enormous problems in the housing market. Now that the Government has tried to lift the shackles and get us back to a relatively normal way of life, the Chancellor has stepped in to offer Government assistance to kick-start house sales.

The main incentive is the stamp duty holiday which he has announced. This has seen an increase in demand of 49% for homes between £400,000 and £500,000 – just under the threshold at which stamp duty now applies. There was also an increase of 26% for homes priced at £300,000-£400,000 but homes below £300,000 have seen the smallest rise in enquiries.

Against that, more than £30,000 could be wiped off the value of a typical home as the pandemic hits the property market. The office for budget responsibility said prices could fall 2.4% this year and 11.7% next year. This would push the average price of a house down from £230,000 to below £200,000.

With the staycation boom and tax breaks, rural estate agents have reported a threefold increase in enquiries into holiday homes. Data for Money Mail from cottages.com shows that queries from investors wanting to buy holiday lets are already 25% up since the stamp duty holiday was announced. Visits to it Let Your Property pages have increased by 180%. Meanwhile, bookings for holiday homes between July 1 and August 31 are already up 156% on last year. And in East Devon and St. Ives bookings are up by 263% and 262% respectively.

The Government has frequently indicated the need to provide many more new homes. It has now looked at the land which it owns itself. A study commissioned for the Ministry of Housing has found that selling 15% of government owned car parking space could raise £6 billion and free land for 110,000 new homes. Many carparks close to town centres, shops and railway stations could be developed into desirable places to live.

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