Activity in the UK housing market during the first few weeks of January often sets the tone for the whole year, though the 2021 outlook is somewhat muddied by the challenges of the pandemic and by the 31st March stamp duty holiday deadline. However, two main things stand out.
Firstly, sellers who have come to the market are continuing to price very competitively, with some perhaps still hoping to find a buyer and complete before the tax-saving cut-off, though the odds are now against them. Newly marketed property asking prices are down by an average of 0.9% (-£2,887) on the month.
Secondly, buyer activity has continued to exceed the same period a year ago, being buoyed by the post-election ‘Boris bounce’. That ‘Boris bounce’ ended abruptly with the first lockdown in March and the temporary closure of the housing market but was followed by a far stronger resurgence as people reassessed their housing needs and priorities following their experience of lockdown. With another long lockdown upon us, there are early signs that we are surpassing 2020’s new-year surge in activity, with the number of prospective buyers contacting agents between 2nd and 12th January up by 12% and sales agreed numbers up by 9% on the comparable period last year.
The latest Rightmove analysis shows that it is now taking 126 days from the time an offer is accepted until legal completion, just over four months. This means that new buyers in the market should not be factoring in any stamp duty savings, unless they are first-time buyers, who will still be mainly exempt after the March deadline has passed.
Of those already in the sales agreed pipeline, now at 613,000 in our latest count, Rightmove’s analysis projects that around 100,000 will miss out on their stamp duty saving. Seller flexibility to re-negotiate will be key to preventing some sales from falling through for this group.
However, it should also be remembered that the surge in buyer demand after the first lockdown in 2020 was initially driven by movers’ changed housing needs, and thus started a couple of months before the July introduction of the stamp duty holidays. The combination of the two resulted in an amazing recovery in 2020 activity despite the pandemic, with the number of sales agreed up by 10% compared to the whole of 2019.
House Price Index
Average House Price: £210,365
Monthly Change: -2.1%
Annual Change: 7.0%
Yorkshire and Humberside:
Average House Price: £202,608
Monthly Change: -2.2%
Annual Change 6.3%
Average House Price: £244,233
Monthly Change: 0.6%
Annual Change: 6.1%
Average House Price: £604,055
Monthly Change: -2.7%
Annual Change: -1.4%
Original Content take from Rightmove House Price Index – January 2021.