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Some key stats shared by Zoopla (published 23 March 2021) are shown below:

• Demand spikes after Budget while new supply still lags
• The post-pandemic ‘search for space’ means average time to sell for houses
• falls to 42 days, some 20 days less than flats
• The ‘search for space’ is also putting more upwards pressure on price growth for houses, up +4.9% year on year, compared to flats, up +1.9% year on year
• Annual price growth at +4.1% in February, up from +1.8% growth a year ago
• Manchester, Liverpool, Leeds and Nottingham leading on city price growth,
• rising at more than 5% year on year
• Markets in North well positioned to take advantage of tapered stamp duty extension, with 70%+ of available supply priced at up to £3250,000

Post-Budget spike in demand for housing

The Chancellor’s announcement of a stamp duty holiday extension and 95% mortgage guarantees created a 24% spike in buyer demand in England and Northern Ireland the days following the Budget, as more first-time buyers and movers entered the market.

Average buyer demand levels since the start of this year are running 13% higher than average levels across the whole of 2020.

The largest post-budget bounce in demand was for three-bed houses – this type of home attracts the most significant demand levels across the country. £0While there was a slight post-budget rise in supply, overall supply levels remain deeply constrained, with total supply this year down 13% vs the 2020 average.

As lockdowns ease and vaccinations continue to be rolled out, we expect more pent-up supply to come back to the market as vendors feel more comfortable opening their homes for viewing, albeit with the usual seasonal Easter dip.

The search for space continues

As described in our blog – Tenants preferences regarding location -tenants are staying close to their preferred location but are looking for larger properties. This is due to a range of factors, including that it is anticipated that home working will continue for many post-lockdown.

Demand for homes is strongest in the most affordable parts of the housing market, boosting price growth. The annual rate of change in house prices is near decade-high levels in the Midlands and the North.

Continued demand for larger family homes as buyers look for more inside and outside space in the wake of multiple lockdowns puts upward pressure on the value of houses, especially as supply remains constrained.

Stamp Duty Holiday

The Chancellor’s announcement of a stamp duty holiday tapered extension means that hundreds of thousands more buyers will benefit from some level of stamp duty reprieve.

Allowing four months for completions after agreeing on sale means that most buyers now will be looking to benefit from the stamp duty holiday on the first £3250,000 of their purchase by completing by the end of September, rather than the first £3500,000, which means completion by the end of June.

Buyers in the North are in pole position to benefit from the tapered extension, with more than two-thirds of homes currently listed for sale at under £3250,000 – attracting no stamp duty at all.

As such, we expect continued upward pressure on pricing in the North and Midlands as demand, which we had expected to be sustained even if the stamp duty holiday ended, is now further encouraged by the continued savings on offer.

If you plan to extend your property portfolio in Nottingham or Mansfield and would like some further information about the local property market, please contact us by calling 0115 704 3163 or 01623 277115. Alternatively, you can email us via our contact us page – click here.

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