When the country went into lockdown in March, the property market ground to a virtual standstill but when it came back, it was with a bang. ITV’s Tonight programme House Prices: Is the Boom Real?, looked at the factors driving the boom and whether it is sustainable in the long run.
Despite uncertainty around the economy, in September there were reports house prices had reached a record high for the third month in a row. So why are so many of us keen to buy and sell?
Pent up demand
After the seven weeks of spring lockdown the housing market – fuelled by pent up demand – was back with a bang.
For property hot spots such as Formby, this has proved to be boom time with more houses sold in the area by September than in the whole of 2019.
Formby’s proximity to Liverpool, good transport links, and a village-feel helped make it the go-to location for those keen to move out of the city.
Buyers are eschewing expensive city-centre flats with no garden for three-bedroom properties in the suburbs. This gives them more space for a home-office and allows them to shift to a different work life balance.
Stamp duty holiday
Record breaking low interest rates and the stamp duty holiday has allowed buyers to move to areas previously outside their budget. With stamp duty savings up to £15,000 for those buying at £500,000 or less, many home-movers are prioritising their homes and buying in sought after areas such as Formby.
Boom to bust?
The demand for three-bedroom properties with a decent-sized garden however has pushed up the prices and commentators are worried that this has created a short-lived boom.
Some commentators believe the chancellor introduced the stamp duty holiday too early as the market was already recovering over the summer. The lockdown created a backlog of people who had been unable to move, and this has had a knock-on effect with delays in getting surveys and conveyancing done.
Analysts are already seeing signs that the market is beginning to slow down. The latest figures for October give early warning indicators that the market might already be starting to soften.
While the housing market has defied the economic outlook for now, 2021 will be a difficult year for house prices as the housing market catches up with expected job losses and a likely recession.
For now, however, Formby is the place to buy, so if you’re thinking of moving to the Formby area, act fast. If you do not have your property on the market already, you are unlikely to make the stamp duty holiday of 31 March 2021 deadline.