Changes can bring new challenges
Annabel Dixon of Zoopla brings you up to speed on the post-lockdown housing market landscape
Chancellor Rishi Sunak has unveiled a stamp duty holiday for England that could save you up to £15,000 if you buy a property worth £500,000 or more. However, the nil rate to £500,000 only lasts until 31 March 2021 so you’ll need to act promptly. The equivalent in Scotland, the Land and Buildings Transaction Tax (LBTT), has seen the nil band raised to £250,000, to the same date. Find out more about how the changes could affect you with the handy explainer produced by my firm, Zoopla, the online real estate resource.
The government has also extended the deadline of its Help to Buy equity loan scheme, which eligible buyers can use to buy a new-build home. Previously, builders needed to have finished construction by the end of December for buyers to qualify. But this has changed to 28 February 2021, with the deadline for legal completion remaining at 31 March 2021, to help buyers whose plans have been delayed by coronavirus. The specifics in Scotland are slightly different, so do check.
However, the number of mortgage deals has shrunk in the wake of coronavirus, with many lenders withdrawing their high loan-tovalue mortgages – in other words, loans for people borrowing a high proportion of the property’s value. This has particularly affected firsttime buyers. A survey by Zoopla has revealed that more than one-third (35 per cent) of under-35s have had their home move delayed, driven in part by the withdrawal of 85 per cent-plus loan-to-value mortgages.
But mortgage rates are, generally-speaking, very competitive, particularly at low loan to values.
The Bank of England made two emergency interest rate cuts in response to the effects of coronavirus on the economy, and the base rate – which tends to influence the interest rates that lenders pass on to their borrowers – is now at a record low of 0.1 per cent.
But, the unprecedented nature of coronavirus means it’s tricky to predict what will happen in the housing market this year. Keep an eye on our monthly House Price Index for expert insights from Zoopla Research. You can find it on our news page.
Zoopla also has a range of free tools to help you get ahead of the game. You can create a Myzoopla account, which allows you to set up email alerts to keep up to speed with your local market and eyecatching properties. You can also use our house price estimates tool to get an instant value estimate of any property in the UK.
We hear a lot about the “new normal” and yes, the housing market is back open, but things have changed a little. Physical viewings are taking place but precautions are needed, so be prepared to go on virtual viewings at least in the first instance. NAEA Propertymark, the UK’S leading professional body for estate agents, advises against open house viewings.
Flexibility is key too. You may encounter delays if people related to your transaction show coronavirus symptoms or otherwise need to self-isolate. And there is always the possibility of further regional lockdowns.
Nevertheless, if you’re keen to roll up your sleeves, now could be a good time to buy a “doer-upper”, especially if you’re extending your property search to south of the Border. That’s because the government’s new rule in England to allow you to add two storeys to your home without the normal planning permission comes into effect next month. Such an extension could either become part of the main home or a self-contained property, such as a granny annexe.
The reform means that you could significantly expand the size of your home, and potentially miss out another rung of the housing ladder.
Note that permitted development rights are already in place to allow certain work to be carried out without planning consent.
Lockdown has given many people a chance to re-evaluate their home and lifestyle. And with the housing markets now back open for business, it’s perhaps not surprising that buyer demand is shifting.
More than half of homehunters in our survey have changed their priorities since the start of the coronavirus lockdown.
According to the Zoopla research, some 44 per cent of those whose criteria have changed are now looking to move closer to the countryside, parks or the coast. And the under35s have recorded the biggest shift in priorities, with one in five saying that they’re more likely to compromise on features, such as prioritising private outdoor space over an additional bedroom.
Meanwhile, auctions can be one way to snap up a bargain home – and avoid a lengthy and uncertain buying journey. So why not consider it? There are two different types of auction so it’s important to do your research. The traditional method means that when your bid is accepted, you’ll exchange contracts immediately and have 28 days to complete the transaction. But with a modern method of auction, you’ll have 56 days to exchange and complete.
Opt for an online auction, and you can have the excitement of bidding remotely – and safe from coronavirus infection – in a virtual auction room.
“Under-35s are more likely to prioritise private outdoor space over an additional bedroom”