The summer months, typically regarded as a quieter period for the property market owing to holiday disruption, have been of particular interest in 2021. Specifically, the build-up to the first deadline for the stamp duty land tax (SDLT) holiday on 30 June prompted a great deal of speculation regarding how the market would react.
As expected, since July there has begun a process of recalibration in house prices. After all, Nationwide had reported that UK house prices rose by 13.4% in the year to June 2021 – this rate of growth was unsustainable.
However, crucially, there has not been the sudden, sharp fall in either activity or prices that were predicted throughout the first half of the year. In reality, the market has remained in rude health in the two months since the first SDLT deadline passed, with strong competition ensuring there has been no summer slump.
Research by estate agent comparison site GetAgent found that asking prices across England did still creep up between June and July – albeit by just 0.1% – despite some people forecasting a sizeable drop-off in July. In London, prices actually rose more notably.
An important point to remember is that there was a backlog of deals that were not completed in advance of 30 June. Data released by Rightmove estimated there were 704,000 sales going through the conveyancing process at the time of the first stamp duty holiday deadline; it has kept the market busy this summer.
Certainly, demand in the buy-to-let (BTL) sector remains high. According to the Intermediary Mortgage Lenders Association, 2021 will be the best year for BTL house purchases since 2016. This marries with Market Financial Solutions’ (MFS) own experiences over recent months, with a large number of BTL investors still actively pursuing new opportunities.
Fast finance remains key
The picture, then, is a positive one. The Government’s decision to introduce the tax break undoubtedly had the desired effect of catalysing transactional activity and market growth – in truth, the Chancellor et al. must be surprised by just how impactful the initiative has been.
Stamp duty rates return to their normal levels from 1 October 2021, which means we are likely to see another rush among property buyers looking to complete deals in September. Indeed, this has been a prevalent theme over the past year – as mortgages took longer to acquire, an increasing number of buyers looked to the greater speed and flexibility of bridging loans.
According to figures from Trussle, the average amount of time it took to get a mortgage approved almost trebled from eight to 22 days over the course of 2020. And that is just for the approval of the application, not the delivery of the loans. By contrast, MFS can deliver a bridging loan in under four days.
While the desire for fast finance is nothing new, it has become an even more important consideration among the clients we work with. It is vital, therefore, that clients partner with bridging loan providers that will ensure there are no undue delays, allowing buyers to proceed with confidence and at pace.
