The Stamp Duty Land Tax (Temporary Relief) Act was introduced by the government in July 2020 to combat the weight of the COVID 19 Pandemic on the housing market. Now, a year later, and nearly 4 months after Stamp Duty began its slow return to normal rates, our data shows that first time buyers are paying up to 31.5% more for properties across England.

### What is the Stamp Duty Holiday (Stamp Duty Land Tax Temporary Relief Act)?

To prevent COVID 19 Pandemic from devastating the housing market, the government intervened with the Stamp Duty Land Tax (Temporary Relief) Act. The Act, also known as the Stamp Duty Holiday, suspended and altered some of the existing rates for SDLT to incite interest in the housing market and galvanise the economy. 

From 8th July 2020 to 30th June 2021, home buyers could pay highly reduced Stamp Duty rates, including zero tax on properties priced under £500,000.

* **Up to £500,000**: Zero SDLT
* **£500,001 to £925,000**: 5%
* **£925,001 to £1.5 million**: 10%
* **Above £1.5 million**: 12%

### How does the Stamp Duty Holiday affect house prices?

As Stamp Duty is a tax on home buyers - the lower the rates, the more money buyers have in their pockets. The holiday, coupled with the severe shortage of homes on the housing market, and a general lack of funds among average-wage home buyers, has made the demand for property skyrocket. With home sellers quick to take advantage of this situation, there’s been a big increase in property prices across the country.

If you’re interested in how house prices are looking in your area, check out our [free House Prices tool](https://www.getagent.co.uk/house-prices). It provides up-to-date information on average house prices as well as their average selling time.

### The average first time home buyer is paying 11.7% more

In July 2020 just before the SDLT holiday was introduced, the [average price of a first-time buyer home](https://www.getagent.co.uk/house-prices) was £212,166. However, our latest figures show the average first-time buyer home now costs £236,982, an increase of £24,816 or 11.7%.

### Biggest increases by region

The North West has seen the largest first-time buyer price increase by region, with the average first-time buyer now paying £168,820. That’s a 16.9% jump since July last year. 

Elsewhere in the north, Yorkshire and Humber have seen a rise of 14.8% and the North East has seen a rise of 13.4%. In the Midlands region, the West Midlands has seen a rise of 13% and the East Midlands a rise of 12.9%

* **East Midlands**: 12.92%
* **East of England**: 11.29%
* **London**: 5.28%
* **North East**: 13.41%
* **North West**: 16.90%
* **South East**: 8.94%
* **South West**: 11.28%
* **West Midlands**: 13.08%
* **Yorkshire and The Humber:** 14.77%
* **England**: 11.70%

### Biggest increases by local authority level

Richmondshire, North Yorkshire, has seen the largest increase in average price for a first-time buyer. Originally £178,974 in June 2020, today the average price has risen to £235,425, an increase of £56,451 or 31.5%

In Rossendale, Lancashire, the average first-time buyer property now costs £147,417, having risen 24.3% since the introduction of the SDLT holiday.

* **Richmondshire:** 31.54%
* **Rossendale:** 24.25%
* **North Norfolk:** 23.09%
* **North Devon:** 18.95%
* **Cotswold:** 18.06%
* **Hastings:** 17.94%
* **Shropshire:** 17.73%
* **West Devon:** 17.71%
* **Derbyshire Dales:** 17.62%
* **Salford:** 17.18%

### Are there any exceptions?

Not everywhere in England has seen a big increase in property price. In some of the more affluent areas of London, the average property price for first time buyers has dropped significantly.

In Kensington & Chelsea for example, the first time buyer’s home cost £1.1 million in July 2020. Now however, the price has dropped to just over £1 million, a decrease of - 6.5%. 

Other decreases include:

* **Hackney:** - 4.1%
* **City of London:** - 4%
* **City of Westminster:** -3% 
* **Southwark** -1.4%

### What the Stamp Duty Holiday means for first time home buyers

While the Stamp Duty Holiday has been a huge success in injecting life into a threatened housing market, it’s undeniable that first time buyers have been marginalised. While many existing homeowners have benefited from a boost to the value of their property, most first-time buyers are worse off when it comes to taking that first step onto the property ladder. 

### What is Stamp Duty?

Stamp Duty Land Tax or SDLT is a government tax on property and land transactions. The amount of tax you pay is proportionate to the amount of money you spend on property or land.

Young woman sitting at a desk with papers and thinking about taxes.

pexels-mikhail-nilov-6964107

A year after the Stamp Duty Holiday was introduced, our data shows that first time buyers are paying up to 31.5% more for properties across England.

First time buyers pay 31% more due to Stamp Duty Holiday

A year after the Stamp Duty Holiday was introduced, our data shows that first time buyers are paying up to 31.5% more for properties across England.


With the Stamp Duty deadline over and done, the UK housing market has been left to recuperate following its blazing period through March to June. As many experts predicted, house sales have experienced a decline. House prices however, are continuing to soar thanks to a sustained demand from UK house buyers. This demand is particularly notable in England’s coastal addresses. An onslaught of buyers looking to relocate from cities has seen the average price of some seaside areas increase by over £100,000.

### UK house sales nosedived in July 

On the back-end of June’s Stamp Duty deadline, July saw UK house sales nosedive by almost two-thirds after home buyers rushed to complete the purchase of their new homes. While the end of the Stamp Duty deadline has tempered the number of house sales, their prices are still on the high. [June's UK House Price Index report](https://landregistry.data.gov.uk/app/ukhpi "UK House Price Index") observed an increase of 4.5% with an average price of £265,668.

Diminishing house sales and rising house prices have done nothing to reduce buyer demand, with Zoopla reporting an increase of 20.5% above the 2020 average. [The Guardian](https://www.theguardian.com/money/2021/aug/24/uk-house-sales-stamp-duty-holiday-deadline-tax-break "The Guardian - UK House Sales") has cited ‘the pandemic and growth of home working’ as key factors to this strong demand. 

With almost two years of lockdowns under their belts, it's no wonder that the average UK buyer is searching for greater space and comfort. Unfortunately, [The Telegraph’s Rachel Mortimer](https://www.telegraph.co.uk/property/buy/acute-shortage-homes-sale-last-2022/ "The Telegraph - Acute Shortage") has reported this ‘acute’ shortage of homes for sale could last well into 2022. With a depleted stock and a sustained demand, it’s unlikely that house prices will go down before the end of 2021.

### Home buyers flock to coastal addresses

Last month, [we revealed the top eight postcodes](https://www.thesun.co.uk/money/15723069/eight-postcodes-house-prices-rocketing/ "The Sun - Eight Postcodes") where house prices surged by almost £100,000, with sunny countryside counties like Cornwall and South Hampshire among the most popular. 

This heightened interest in coastal addresses suggests a shift in buyer attention from traditional city hotspots. In a [similar study of 120 coastal areas](https://www.rightmove.co.uk/press-centre/coastal-homes-sell-twenty-days-quicker-than-pre-pandemic-as-city-to-seaside-demand-doubles/ "Rightmove Coastal Homes Study"), Rightmove recorded an increase of 115% in city dwellers enquiring about homes for sale in coastal locations. They concluded that this interest could increase competition among buyers.

While coastal addresses are no doubt seeing a surge in popularity, Zoopla has curtailed any doubts that London might suffer as a result. In [their 23rd July press release](https://www.zoopla.co.uk/press/releases/zoopla-reveals-how-property-size-impacts-buyer-demand-for-new-homes/ "Zoopla - Property Size"), they reported that the demand for properties is ‘more concentrated’ in London, with average buyers searching for new homes within a five mile radius.


a folded newspaper lying next to a cup of coffee on a wooden table 

property-news-may-14

House sales nosedive, while demand continues to inflate prices.

Property News August 27th | House sales nosedive

Property news of the week: August 27th 2021

### What is the mortgage guarantee scheme?
The [mortgage guarantee scheme](https://www.gov.uk/government/publications/the-mortgage-guarantee-scheme) is a temporary government initiative designed to encourage lenders to increase the number of low deposit options available to those looking to buy a property. The scheme will run from April 2021 to December 2022. 

The scheme allows lenders to purchase a government guarantee against a low deposit mortgage. If the borrower is unable to keep up repayments, the government will compensate the lender for a portion of their losses. 

The guarantee scheme is designed to support mortgages with a loan-to-value of between 91% and 95%. This means a borrower would only need to put forward a deposit of between 5-10% of the value of the property. 

In practice, borrowers will see no difference if their mortgage falls under the scheme. You'll make your mortgage applications in the same way, and will still be liable to make your mortgage payments each month. And, if you fail to keep up with their repayments, your home may be repossessed - as with a normal mortgage. 

The guarantee scheme is solely designed to make lending more appealing to banks, who have reduced the number of 95% mortgages available during the period of the coronavirus pandemic. 

### Am I eligible for the mortgage guarantee scheme?

To be eligible to borrow under the mortgage guarantee scheme, you'll have to fit the following criteria:

* **The property you want to buy is residential, and you plan to live there**

Mortgages for commercial properties, or pieces of land, aren't included in the scheme. You also can't apply for this type of mortgage if you intend to rent out the property.

* **The property you want to buy is based in the UK, and is worth less than £600,000** 

* **The loan-to-value (LTV) of the mortgage must be between 91%- 95%** 

Loan to value is the percentage of the property's value that's covered by the mortgage. A 95% loan to value means that you'll pay 5% of the cost of the property upfront, and the bank will lend you the remaining 95%. For example: if you want to buy a £200,000 flat with a 95% LTV mortgage, you would pay £10,000, as a deposit, and the bank would pay the remaining £190,000. When you make monthly repayments on your mortgage, you're actually buying back this 95% share from the bank. 

* **Repayment mortgage product (rather than an interest-only mortgage)** 

This means you'll pay back both a portion of your loan, and interest, each month. To read about the other types of mortgages available, [head here.](https://www.getagent.co.uk/guide/mortgages/types-of-mortgage) 

* **Meet the standard affordability requirements of the lender** 

This often takes the form of a credit score check, and assessment of your annual income and outgoings. As a general rule, mortgage lenders will not lend more than 4.5 times your annual income. So, if you earn £30,000, you will be able to borrow a maximum of £135,000. 

Individual participating lenders may have additional eligibility criteria too.

Several banks, including Santander, NatWest, and Barclays will not allow you to apply for a 95% mortgage if you're hoping to buy a new build property. This is because many lenders view new builds as a riskier investment, because they are often bought at a premium, and struggle to keep their value in the short term.   

Others have placed their own value caps on the mortgage products. For example, Barclays has limited guarantee scheme [borrowing against flats to £275,000](https://www.barclays.co.uk/mortgages/help-to-buy/mortgage-guarantee-scheme/), and Santander has set their [limit against flats at £400,000](https://www.santander.co.uk/personal/mortgages/new-customers/mortgage-guarantee-scheme) - rather than the maximum £600,000 laid out in the government guidance. 

For full information on eligibility, we'd recommend talking to each lender, or a mortgage broker. They will be able to assess your individual circumstances, and let you know whether you meet all the relevant criteria. 

### Pros of the mortgage guarantee scheme

There may not be much difference, in practice, with paying off a guarantee scheme mortgage, but that doesn't mean there aren't any positives to the scheme. For borrowers, some of the pros include: 

* **Longer fixed term period options**

'Fixed rate' mortgages have a period of time - usually between 2 and 5 years - where the interest rate is fixed. After this, your mortgage will switch to a 'Standard Variable Rate', which usually follows in line with the Bank of England's interest rate. A fixed rate mortgage makes it easier to plan financially, as you'll not be hit by any surprise increases to your monthly repayments if the Bank of England rate suddenly increases. One of the conditions of the mortgage guarantee scheme is that lenders must offer at least one 5-year 91-95% mortgage product. 

* **Smaller deposit** 

As this scheme is designed to increase the number of 91 to 95% loan to value mortgages available, it should increase the number of low deposit mortgage options available to borrowers. If you fulfil all the other affordability criteria this means there'll be a lower upfront cost to buying a house. 

* **Repay mortgage in the normal way**

Unlike the Help to Buy schemes - which require you to make a financial agreement with the government - this scheme allows you to take out a mortgage in the normal way. There are no special mortgage applications; you won't owe part of your mortgage to the government (as with the equity loan), and you'll own the entirety of the property (unlike with shared ownership). 

* **These low deposit mortgages are available to both first time buyers and home movers**

* **Can be used for 'second hand' properties** 

Unlike other government schemes - such as Help to Buy - this scheme isn't limited to new build properties. 

### Cons of the mortgage guarantee scheme

However, there are some disadvantages too. Before you decide whether to go ahead with one of these guaranteed 91% to 95% mortgages, make sure you also consider the following: 

* **Expensive** 

As a general rule, the higher the percentage you borrow against a property, the higher the interest rate on your repayments. This means you may end up paying more overall. Consider whether it's worth saving up a larger deposit, before you commit. 

* **You'll still need to meet the other affordability criteria** 

While these mortgages mean you only have to put up a 5% deposit, they don't remove the lending limit of 4.5 times your annual income. This means if you earn an average salary, you may still find it hard to borrow the amount you need to get onto the housing ladder.

For example, if you want to buy a house that costs £200,000, and have a 5% deposit of £10,000, you will need to be earn £43,000 a year in order to qualify. If you earn the UK average of [£31,500](https://www.cosmopolitan.com/uk/worklife/careers/a33179/average-job-salaries-uk/#:~:text=The%20average%20salary%20(UK)%20for%20115%20different%20jobs&text=The%20survey%20found%20the%20average,3.6%25%20on%20the%20previous%20year.), you are likely to be eligible to borrow around £141,750. With a 5% deposit, this means you could afford a property worth just under £150,000. 

* **Limited time offer** 

The scheme is temporary, and will only run between April 2021 and 31 December 2022. While it's hoped that many lenders will continue to offer low deposit mortgages after this, without government support, there may still be a drop in the number of products available. 

* **New build properties are often ineligible** 

Many lenders have additional criteria for the mortgages that fall under this government scheme. Most have decided that they will not offer low deposit mortgages on new build properties, as they pose too risky an investment for the lender. 

Parent and child sat at wooden desk hug as they look at computer screen in new home

what-is-the-mortgage-guarantee-scheme

The mortgage guarantee scheme is a temporary government initiative designed to encourage lenders to increase the number of low deposit options available. 

95% Mortgages | What is the Mortgage Guarantee Scheme?

The mortgage guarantee scheme is a temporary government initiative designed to encourage lenders to increase the number of low deposit options available to those looking to buy a property. We look at the pros, cons, and eligibility criteria. 

What is the mortgage guarantee scheme?

Knowing whether now is a good time to buy a house isn't an exact art. However, there are some ways you can get a general impression of whether the market is likely to be in your favour.

In this article we look at what makes a 'good' market for a buyer, and examine how the housing market is doing currently. We'll also make some tentative predictions about how the housing market will change in the coming months, to help you decide whether to buy now, or wait for more favourable conditions.

### How do you know if it's a good or bad time to buy a house?

If you're in the early stages of your home buying journey, there are a few things you can check out to see whether the market is currently in your favour. Being armed with this information will help you decide whether to take the leap, or to wait until you can get a better deal.

We'd recommend starting with the following questions:

* **Can you find homes you like on the market?**

When you look on online portals, do you see the sort of property you're looking for regularly, or do they only come up every so often?

Asking [estate agents](https://www.getagent.co.uk/estate-agents) is another good way to gauge how often you'll find properties that fit your criteria come up on the market.

Of course there are some houses that are always in short supply - like detached homes in central London, or studio flats in Colne - but checking out what's available is a good way to see whether you'll actually be able to find what you're looking for when you're ready to put in an offer.

[Buying and selling at the same time? Read more about how to juggle the process here.](https://www.getagent.co.uk/blog/first-time-sellers/buy-and-sell-at-the-same-time)

* **Are house prices going up or down?**

If house prices are going up its generally a sign that the market is currently working in favour of sellers rather than buyers. House prices tend to go up when there's not enough homes to meet demand and competition between buyers drives up the price.

Remember there's usually a fair amount of local variation when it comes to property prices. Big cities like London and [Edinburgh](https://www.getagent.co.uk/area/edinburgh/living-in-edinburgh) are often among the most expensive for those looking to buy a home. Whereas smaller, rural communities tend to have lower property prices. Each area will experience house price fluctuations depending on what's going on nearby, for example: a large infrastructure project, or investment into local employment.

Curious about how much your home is worth right now? [Check out our free, online valuation tool here.](https://www.getagent.co.uk/how-much-is-my-house-worth)

* **How's the mortgage market?**

The mortgage market and housing market are intimately intertwined. When interest rates are low buyers are more likely to be active, because borrowing money is more affordable. On the other hand, when there are few mortgage products available - or interest rates increase - it becomes more expensive for people to borrow money, so fewer people look to buy.

Affordable mortgage rates can be a double-edged sword. They can make it easier to buy a home, but can also cause greater competition because other buyers also want to take advantage of the favourable rates.

### So, how are things looking for buyers, right now? 

### Housing supply

One of the biggest issues facing property buyers in the UK at the moment is a lack of houses actually available to buy. According to property portal Zoopla, housing supply is currently **20.8%** lower than last year. This is in line with comments from Rightmove that stock levels on the site were at an 'all time low'. 

However this issue of supply is worse for particular types of homes. Many buyers are looking for family homes, or properties with gardens. For example, Rightmove found 14% fewer new listings put on the market between January and March this year, however there were around *30% fewer* new listings of 3- or 4- bedroom detached properties - the current most popular property type for UK buyers.

However, those looking to buy a property in a city centre are likely to have more choice. Central [London](https://www.getagent.co.uk/area/london), for example, is one of the areas witnessing lower than average levels of buyer demand. Many speculate that this is the result of a shift in buyer priorities. Whereas previously, home buyers were keen to find a property close to their workplace, many people are now looking for properties that offer more space for the price, even if they are slightly further away from the office. 

### Why are fewer sellers putting their property on the market right now?

Zoopla predicts that the number of home sales this year will hit 1.5 million by December 2021 - 45% higher than the year before. This suggests that the lack of supply is caused in large part due to extra buyer demand, not a lack of sellers coming to market. However, there has been a slow down in the number of new properties entering the market, suggesting some reluctance amongst sellers. 

There are a number of reasons why people are slightly more reluctant to sell their properties right now. These include:

* **The pandemic**

The home selling process involves a lot of contact with potential buyers coming for viewings. Many home owners have been reluctant to start marketing their property because of the potential risk of transmission. However, with the easing of restrictions, and significant proportions of the population being vaccinated, it's likely more people will be happy to have potential buyers over for viewings again soon.

* **Stamp duty holiday deadline**

While many buyers are keen to take advantage of the stamp duty holiday, some sellers are cautious about marketing their property too close to the deadline. [Some sales will not complete in time](https://www.estateagenttoday.co.uk/breaking-news/2021/3/stamp-duty-surge-adds-weeks-to-time-it-takes-to-complete?source=newsticker) to take advantage in the savings, and this could lead to transaction fall throughs if a buyer can't pay the upfront stamp duty cost. 

* **Financial uncertainty**

The [economic impact of the coronavirus pandemic](https://commonslibrary.parliament.uk/research-briefings/cbp-8866/) has not yet been felt in full. Some people don't want to make large financial decisions, such as taking on a mortgage, until they completely understand how secure their financial position is for the future.

* **Buyer competition**

Many people who put their homes up for sale are *also* looking to buy. Some people are holding off selling until there are more properties on the market to choose from.

However, sellers that are putting their homes on the market right now, are finding that they sell incredibly quickly, and generally for **much higher prices** than they anticipated.

**Will this change soon?**

Several estate agents and property commentators have predicted that the end of lockdown restrictions will encourage sellers to feel more confident about putting their property on the market, and having people over for viewings.

Additionally, it's likely that the tapering off of the stamp duty holiday will contribute to a lessening of buyer demand. Many home buyers moved forward their purchases in order to take advantage of the savings. This means it's likely that once the holiday has ended, we may see a period where fewer people than normal come to the market - reducing the imbalance between demand and supply. 

There are signs that the situation for people buying a home is already improving - albeit slowly. The [Royal Institute of Chartered Surveyors (RICS) State of the Market Survey](https://www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/5._web_-may_2021_rics_uk_residential_market_survey_tp.pdf) asks estate agents and surveyors for their views on the property market both nationally and in their local area. The latest survey saw that on balance respondents thought that 'appraisals were up on the same period last year'. This is a good indicator that more homeowners are interested in selling, and hopefully this will translate into a wave of new properties coming onto the market in the next few months.

### Competition from other buyers

Despite there being fewer properties on the market than normal, there are more people looking to buy.

Estate agent [Hamptons](https://www.hamptons.co.uk/research/articles/stock-shortage-fuels-bidding-wars/) reports that the number of prospective buyers increased by 17% in the first 3 months of this year. This means that for every new property put on the market there were more than 9 people registering their interest, on average, between January and March this year.

According to NAEA PropertyMark, 1 in 6 properties sold for *more* than the asking price in March, suggesting that this buyer competition is working to drive up prices. 

A number of estate agents commented on current levels of buyer demand as part of the RICS Market Survey. Sentiments such as 'demand for houses at all levels is unprecedented', and 'very much a sellers market with insufficient stock to meet demand' were common responses from agencies across the country.

### Why is home buyer demand so high?

Buyer demand has been encouraged throughout the pandemic by a range of things, including:

* **Government incentives**

In order to support the housing market during the periods of lockdown, the Government has introduced a range of incentives to encourage people to move home. The most important of these is the [stamp duty holiday](https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates), which means buyers won't have to pay any stamp duty land tax on residential property purchases up to £500,000. This gives buyers have the opportunity to save up to £15,000 upfront if they buy before the deadline. Although the stamp duty holiday is beginning to taper off, even the reduced rate coming into force at the end of June, will provide upfront savings to those buying properties costing less than £250,000 until October. 

* **Lockdown**

Lockdown has meant we've all spent more time at home. This has encouraged many to think seriously about what they need from the place they live, and to explore buying a home further away from the office.

* **Low interest rates** 

Interest rates in the UK are currently very low, this makes borrowing money to buy a house much more affordable.

* **House prices**

Due to the high levels of demand from buyers, and the low numbers of properties on the market, house prices have grown massively over the past year.

According to the latest [Land Registry House Price Index](https://landregistry.data.gov.uk/app/ukhpi/browse?from=2020-02-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2021-02-01&lang=en) the average property price in England is £268,000. This is 8.9% higher than a year ago - an increase of just under £25,000.

The situation is, however, different in different parts of the country. For example, where house prices in the North West has increased 11.8% since last year, areas of inner London have witnessed very slow rates of house price growth. House prices in the City of London for example, have actually decreased 13.6% since last year.

### The mortgage market

Right now, the mortgage market is pretty favourable for those looking to move house. Interest rates are low, which makes it more affordable to borrow. [Moneyfacts.co.uk](https://moneyfacts.co.uk/news/mortgages/the-best-residential-mortgage-rates-090421/), who follow the mortgage market closely, have found rates starting at as low as 0.95% for home movers who are able to put forward a 40% deposit. 

The mortgage market is, on the whole, less favourable for first time buyers. This is because first time buyers present a greater risk to lenders and tend to have smaller deposit. First time buyer mortgage products are gradually returning to the market, supported by the government's new mortgage guarantee scheme, but they retain a strict affordability criteria.

### So, is now a good time to buy a house?

Currently the property market is a seller's market. Which means conditions aren't that great if you're thinking about buying a house. House prices are high, and there's lots of competition for the best homes. It will be hard for many buyers to find the right house, or get the best deal.

However, that doesn't mean there isn't scope for buyers to take advantage of the situation too. Many home sellers are keen to move quickly to ensure they meet the stamp duty holiday deadline. And, there are some areas - such as city centres - where fewer buyers are looking, and house price growth is slower than normal.

Make sure you're up to date with local and national trends. [Head here to see the best places in the UK to buy and sell property right now, along with a range of other useful statistics about the market.](https://www.getagent.co.uk/house-prices)

If you're looking to buy a property now, we'd recommend getting independent financial advice before committing to a property or mortgage deal - particularly if you intend to move again in the next few years. They will be able to provide advice tailored to your financial situation, and explain the risks should inflation cause interest rates to increase.

### Other things to consider
Figuring out what's best for your personal circumstances is often just as important as understanding the property market when it comes to deciding whether now is a good time to buy a house or not.

Make sure to assess your circumstances from both an emotional and financial perspective. Two good places to start include:

* **Can you afford the mortgage?**
This isn't as simple as knowing you have the deposit available. You should also consider how you would manage the [repayments](https://www.getagent.co.uk/guide/mortgages/mortgage-short-on-cash) if you lose your job or are furloughed in the future. Consider what other life events might impact your income - for example taking time off work for maternity leave.

* **What's driving you to move?**
If the reason you're buying a house is: a new job, an expanding family, or to release equity, then what's going on in the wider market is likely to be less important than finding the right new property to suit your needs.

Parent and young child wearing warm clothing run excitedly through a park 

is-now-a-good-time-to-buy-house-UK

In this article we look at what makes a 'good' market for a buyer, and examine how the housing market is doing currently. Is now a good to buy a house?

Is now a good time to buy a house? Summer 2021

In this article we look at what makes a 'good' market for a buyer, and examine how the housing market is doing currently. We'll also make some tentative predictions about the way the housing market will go in the future to help you decide whether to buy now, or wait for more favourable conditions.

Is now a good time to buy a house?

It’s hard to believe that a year has passed since Chancellor, Rishi Sunak, first introduced the holiday on Stamp Duty. Now however, as these tax breaks retreat into their exit phase, there’s a lot more talk about ‘damage done’ rather than ‘money saved’. In the midst of this, are questions regarding the future of the property market.

### Rush to beat stamp duty deadline

Ahead of June 30th’s staggered return to normal stamp duty rates, there have been calls for alarm regarding its inflammatory effect on the property market. During a webinar on inequality hosted by the University of Glasgow on Tuesday the 8th, Andy Haldrane, the Bank of England’s chief economist, warned that the housing market was ‘on fire’.

Indeed, while many welcomed the extension of the stamp duty cut deadline, data suggests that, combined with favourable interest rates for low mortgages, the extension has resulted in a struggle to meet demand. [Rightmove’s figures](https://www.rightmove.co.uk/press-centre/biggest-sales-pipeline-over-past-ten-years-buyers-undeterred-by-stamp-duty-holiday-ending/) alone state that over 704,000 homes are now in the process of being sold across the UK. 

These huge numbers are accompanied by an inflation in housing prices. The UK’s largest lenders, Nationwide Building Society and Halifax have both reported large annual price increases of over 10%. In their [Housing Market Update](https://www.savills.co.uk/research_articles/229130/314970-0), Savills have likewise reported a double digit growth of 10.9%, the highest since August 2014.

### Speculation on house prices beyond SDLT holiday

While many experts have predicted the house market’s growth will slow after June 30th, Savills have stated that ‘strong value growth, putting more equity in home-movers pockets’, will be an advantage and may help sustain high activity beyond the SDLT holiday.

Increased savings have also played a big part in the market’s boom. Thanks to the introduction of lockdowns and work at home schemes, richer households have accumulated well over £106 billion in savings since the beginning of the pandemic. According to Zoopla, over a quarter of new movers (from a study of 2400 subjects) claim that it was due to increased income that they were finally able to move homes. 

These new savings could help the seller’s market to continue on strong after the SDLT deadline, as rich and competitive buyers are likely to continue bidding to secure their new home. Though the 117,860 transactions in April were 36% lower than the record-breaking 183,170 seen in March, they were still 59% above the 2018-20 average.

However, the rush in March for buyers to meet the initial SDLT deadline demonstrates just how reliant the market’s current boom is on the holiday. After SDLT rates begin to dial back to their original levels, the demand for homes may well decrease. Without the demand of the past year, house prices could be seen to even out.

In the wake of Mr Haldrane’s warnings, however, the Bank of England has sought to ease concerns regarding the market’s future. Deputy Governor, Dave Ramsden, has assured watchers that the central bank was carefully observing the housing market for another jump in consumer price inflation.

Rush to beat stamp duty deadline (again) - and what next for house prices. 

Property News 17th June | Rush to beat SDLT deadline (again)

Property news of the week: June 17th 2021

### Boom in housing market leads to BofE vigilance on inflation

With the booming UK property market surging towards its busiest year since the global financial crisis, a key policy maker says the Bank of England is monitoring the sector over fears it could trigger sustained inflation.

Zoopla says around 1.5 million homes are expected to change hands in 2021 -- a 45% jump from 2020. That would make it the busiest year for Britain’s housing market since 2007 and one of the top 10 years since 1959.

The total value of homes sold in 2021 is expected to rise 46% from last year, reaching £461 billion by the year’s end, according to Zoopla’s latest House Price Index.

The growing strength of the property sector has caught the attention of Bank of England Deputy Governor Dave Ramsden, whose portfolio includes markets and banking.
‘There is a risk that demand gets ahead of supply and that will lead to a more generalised pick-up in inflationary pressure. That’s something we are absolutely going to guard against’, [Ramsden told the Guardian](https://www.theguardian.com/business/2021/jun/01/bank-of-england-monitors-uk-housing-boom-as-it-weighs-inflation-risk-dave-ramsden-covid). ‘We are looking carefully at the housing market and a raft of real-term indicators’.

As measured by the UK consumer price index, inflation currently stands at 1.5%. It’s expected to rise above its 2% target briefly over the coming months.

But if inflation proves longer-lasting, Ramsden said, BofE would consider raising the bank rate up from its current historic low of 0.1% to help cool off the market.

Zoopla credits a few factors related to the pandemic for the property boom:

* The [stamp duty holiday](https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates) instituted last summer

* New [government-backed mortgage scheme](https://www.gov.uk/government/news/new-95-mortgage-scheme-launches) that will help first-time buyers and some homeowners secure a mortgage with just a 5% deposit.

* A pandemic-driven ‘search for space’, whereby homeowners are seeking properties with gardens and more indoor room for home working

‘House price growth is strongest in areas where affordability is greatest’, Zoopla notes. That’s especially true in Wales, where prices are up 6.3% year-on-year, as well as Yorkshire and Humberside (5.4%) and the north west of England (5.3%). On the other hand, prices are rising most slowly in London (1.9%).

Zoopla’s report comes after mortgage lender Nationwide predicted UK house prices would continue to rise beyond the stamp duty holiday, which is scheduled to be wound down this summer.

‘There will be periods when it goes down a bit’, [says Joe Garner](https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2021/May_2021.pdf), Nationwide’s chief executive, as saying. ‘But particularly as people are buying much more for their long-term home, it doesn’t matter so much the day-to-day value of the property if it’s somewhere they really want to live’.
**What’s going on in the property market near you?** [Check out our house prices page for an in-depth & local look at the UK’s property market.](https://www.getagent.co.uk/house-prices) 
### Mixed news on mortgages

[The Guardian reports](https://www.theguardian.com/money/2021/may/23/mortgage-competition-hots-up-and-rates-fall-to-under-1-for-some) this is a ‘golden time’ for mortgages, with rates as low as 0.99% for some remortgagers and homebuyers on a two-year deal. The best deals are targeted at those with large deposits, it says.
According to the financial data firm Moneyfacts, they’re the cheapest five-year fixed-rate mortgages offered for at least 14 years.
Not everything on the mortgage front is rosey, however.

The [Telegraph reports](https://www.telegraph.co.uk/property/buy/banks-penalise-homeowners-took-covid-mortgage-holidays/) that some mortgage lenders are penalising homeowners who sought help from their banks during the height of the pandemic by seeking higher mortgage rates and rejecting new loan applications.

Some mortgage customers took a repayment holiday under rules introduced in 2020 to help people struggling with financial pressures stemming from the pandemic. As a result, nearly 3 million homeowners agreed to deferred payments after being assured doing so wouldn’t affect credit files.

But many of these borrowers have since been pushed onto more expensive mortgage rates, the Telegraph reports. Citing research from NerdWallet, the newspaper says around 10% of mortgage customers have also had an application rejected because they took a repayment holiday.

Lenders’ actions are consistent with the letter, if not the spirit, of the law, the Telegraph quoted NerdWallet’s John Ellmore as saying. ‘Indeed, applicants who have taken advantage of loan repayment holidays as a consequence of the financial pressures caused by the pandemic may well find themselves unfairly targeted, given use of such schemes was not meant to impact on their ability to access credit in the future’, he said.

### Ban on renter evictions ends on England

A ban on rental property evictions enforced by bailiffs during lockdown ended on 1 June in England.

That means eviction notices can now be set at four months, whereas they had previously been extended to six months because of the pandemic. Assuming the lockdown restrictions ease as planned, the notice period will revert to where it was pre-pandemic -- usually two months.

The ban was introduced in England at the start of the first lockdown in March 2020, while governments in Northern Ireland, Scotland and Wales also took similar action.

Housing Minister Christopher Pincher [said the end of the ban](https://www.bbc.co.uk/news/explainers-53860154) would ‘ensure tenants continue to be supported with longer notice periods, while also balancing the need for landlords to access justice’.


Bank of England keeps an eye on property market impact; mortgage rates lowest in 14 years - but will it last? And, the ban on evictions comes to an end. 

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