HOUSE SALES FRENZY
40 viewings, 28 offers... and sold for well over the asking price. Just one example of...
BRITAIN’S house buyers have gone bonkers as prices soar to record highs. Estate agents told Money Mail ‘frantic’ buyers are battling over spacious family homes, coastal boltholes and rural retreats.
They say the Chancellor’s stamp duty holiday in England has ‘turbocharged’ a housing market that was already buoyant after lockdown ended.
But with rising unemployment forecast, and the stamp duty holiday on homes up to £500,000 to end in March next year – in Scotland, houses under £250,000 will be excluded from Land and Buildings Transaction Tax (LBTT) until March too – experts are urging buyers to think carefully before paying above the odds.
The Centre for Economics and Business Research (CEBR) has warned that after the boom, values could plummet by as much as 14 per cent next year.
FIERCE PRICE WARS
THE number of buyers looking for a home rose by 38 per cent in July, compared with the same period last year. In Scotland, figures due to be published by Registers of Scotland next month could reveal it was the highest month for house sales ever.
With some buyers desperate to change their lifestyle post-lockdown, crazy money is being offered for some select properties, with 10 per cent over the Home Report being offered.
One semi-detached villa in Giffnock, East Renfrewshire, was pitched to the market at offers over £565,000 but sold following a bidding war for more than £700,000.
Harry Maitland is a director of the country house team at estate agent Savills.
He said: ‘We sold Linden Park, a lovely big farmhouse in Auchterarder in Perthshire to a buyer in New York who hadn’t even seen the property in real life. The house had been on the market for a year with another agent before we took it on just before lockdown.
‘As soon as the market reopened in June, two of the people who had considered it before, but hadn’t acted, came back to say they had changed their minds.
‘This created competition and we obtained a tidy premium on the £695,000 asking price.’
Mr Maitland added: ‘We also think we achieved the highest price ever paid for a house in Pittenweem, in the lovely East Neuk of Fife.
‘Sandwood is an attractive modern home which was on sale for offers over £1.1million. It sold in a weekend.
‘I had to make some uncomfortable calls to viewers who were booked in to look at the property but missed out.’
Savills also sold Dreel Lodge in Anstruther, Fife, after securing no less than 50 viewers at offers over £395,000.
Duncan Young, of Sanderson Young, held more than 40 viewings and received 28 offers on a £575,000 four-bedroom semi-detached home in Gosforth, Northumberland. It sold for well above the asking price after less than a month on the market.
LURE OF VILLAGE LIFE
SMALLER towns and villages are also now drawing buyers away from neighbouring cities and crowded locations. Experts say lockdown has driven buyers to want more green space.
Analysis by property site Rightmove found villages made up more than half of 16 hotspots in England where sales between January and September have already beaten the whole of 2019.
Estate agent Gascoigne Halman says between June and August it saw a 77 per cent year-on-year rise in the number of homes sold in Chapel-en-le-Frith on the Derbyshire-Cheshire border.
Its managing director John Halman says: ‘The countryside location and proximity to the Peak District National Park is attracting homebuyers who see the appeal of wide open spaces after the nationwide lockdown. The stamp duty holiday has turbocharged the market and prices are rising.’
BIDDING BATTLES
SOME properties are receiving so many offers that sellers have to run secret bidding auctions.
If multiple buyers are interested in the same home, agents can ask them to all submit a sealed bid. The seller then chooses which bid to accept, or a shortlist of buyers is drawn up and they are invited to submit a final higher bid.
Martin Walshe, director of Cambridge-based Cheffins, says: ‘In the past 100 days we have sold 160 homes. Demand is at such a level that we have had more than 25 properties go to sealed bids in the past four weeks.
‘Lockdown made those who were already considering a house move almost frantic with anticipation for estate agents to reopen.
‘And the spike we have seen in enquiries since the rules were relaxed has overtaken any other peak I have experienced during my career.’
LONDON’S CALLING
EVEN London is enjoying a busierthan-expected late summer, as buyers look to upsize to get more space and rush to beat the March 31 stamp duty deadline.
Aside from a 1per cent rise in prices in the three months to March, London’s housing market saw a decline in prices for the previous ten consecutive quarters, according to Nationwide.
But despite reports that the capital’s residents are fleeing the big smoke and heading for the hills, surveyors and agents are reporting a flat but stable market since lockdown restrictions were lifted.
Harry Buchanan a director at Jackson-Stops in London, says sales are up 55 per cent compared with the same period last year.
MOVERS BEWARE
YET some agents expect the buying frenzy to cool off as we head into the winter months, while others predict the boom will last until the stamp duty and LBTT holidays ends in March.
With job losses forecast when the UK Government’s furlough scheme ends next month, buyers should proceed with caution.
If house prices were to fall suddenly, owners could end up in negative equity where the amount owed in a mortgage is greater than the value of the house.
Dr John Boyle, head of strategy and research in Scotland at estate agents Rettie, said: ‘We expect bad economic news in October. There are those in the industry who believe the market could go into hibernation immediately afterwards.
‘But we have a full book to work through at the moment. We are not worried that the boom has only a few weeks left to go.
‘Mortgages are getting tighter to obtain. While there is good competition in the market, there are not many lenders offering 90 to 95 per cent mortgages any more.’
He added: ‘But while this ‘‘mad’’ market has to end some time, I do not believe we are heading for a crash.’