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Driving Momentum in the Property Market
The property market is flourishing now more than ever, with the number of sales agreed on sky-rocketing. For every property listed on the market, there are over 13 buyers. Activity in the market continues to intensify. The number of sales agreed in April was 57% higher in comparison to April 2019.
What exactly is causing the surge in demand? The extremely low-interest rates are attracting a vast number of homebuyers. People continue to take advantage of the increasing mortgage availability due to boosted confidence in lenders. Furthermore, the extension to the stamp duty holiday has strengthened momentum in the sector. This is because more people can now take advantage of the scheme as they have more time. Previously, those aspiring to move could have potentially missed out on the savings. Nevertheless, the deadline extension allows more people to strive to step onto the property ladder.
Currently, regions across the UK are witnessing record-high sales. Buyers are now moving into rental properties to enable them to move quickly once they have finalised a home. According to NAEA Propertymark chief policy advisor, some people are moving into caravans and living in the area so they can quickly pounce at new opportunities if anything comes to the market.
Sales Agreed Continue to Sky-Rocket
According to property market analysts TwentyCi, the number of sales agreed topped 157,000 last month. Illustrating the phenomenal rates of activity in the market. The market simply cannot keep up with the unparalleled levels of demand due to the significant shortage of housing supply.
Additionally, the industry is struggling to cope with the flood of transactions levels. The number of transaction deals is running at 130% above the average capacity. According to the HMRC, the provisional estimate of transactions in March was 190,980. Transaction levels were a third higher than in February. Astonishingly, the number of transactions doubled in March 2021 in comparison to March 2020.
Chief Executive of SPF Private Clients, Mark Harris states transactions are a ‘surer sign’ of the health of the housing market than housing prices. “Transactions are always a surer sign of the health of the housing market than house prices and a surge in activity in March shows that people continue to hunt for more space while taking advantage of the stamp duty holiday and cheap mortgages.
“With a growing number of lenders offering high loan-to-value deals at 95 per cent, this appetite is only going to increase, pushing transaction numbers (and prices) higher still, particularly if supply continues to lag behind demand.”
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