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New research reveals the UK’s Help to Buy hotspot

Research by lettings and estate agent Benham and Reeves has revealed which UK cities are currently seeing the most demand from homebuyers for properties eligible for Help to Buy.

With the current Help to Buy equity loan scheme expiring last month, the Government announced a replacement scheme to start as of this April. The latest version of the scheme is restricted to first-time buyers and includes regional property price caps.

Benham and Reeves analysed what proportion of Help to Buy stock was already sold subject to contract or listed as ‘under offer’ across 25 major UK cities and what this demand translates to as a percentage of all Help to Buy stock listed.

Bristol is currently the UK’s Help to Buy homebuyer hotspot, with 60% of all homes eligible for the scheme already sold subject to contract or under offer.

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Portsmouth and Swansea also rank high, with half of all homes listed with the help of Help to Buy already taken by homebuyers.

Oxford is home to the next highest level of Help to Buy homebuyer demand at 48%, with Leeds (35%), Southampton (34%), Glasgow (33%), Cambridge (32%) and Bournemouth (31%) also ranking within the top 10.

It’s a three-way tie for the 10th top spot, as London, Manchester and Liverpool all see Help to Buy demand from homebuyers currently sit at 29%.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Marc von Grundherr, director of Benham and Reeves, said: “While the stamp duty holiday has been a great way of boosting market health during a very tough period, further fuelling demand has only helped push house prices further out of reach for many first-time buyers.

“This has made the aspiration of homeownership all the harder and it’s clear that many are reliant on a leg up via the Help to Buy scheme as a result, with high demand for homes that qualify in cities all over the UK.

“Of course, it’s fair to say that Help to Buy in its various forms has also helped drive demand with homebuyers purchasing property that they would otherwise have been unable to afford.

“So perhaps instead of introducing yet another demand-based initiative to artificially inflate house prices, it’s time the Government really start looking at building more houses if they do wish to ‘help those that need it most’.”

Source: Property Wire

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40% of FTBs in the UK have taken advantage of the stamp duty holiday

New research by regulated property buyers GoodMove has revealed that 39% of first-time buyers in the UK have taken advantage of the stamp duty holiday, and a further 8% have not yet bought a home but are planning on using the stamp duty holiday extension to do so.

Those aged 25-44 are most likely to have taken advantage of the stamp duty holiday in the past year at 42%, and 18–24-year-olds are most likely to say they either haven’t taken advantage of Stamp Duty when they bought their home (50%) and say they won’t take advantage of the holiday in the future (10%).

House prices and deposits are at an all-time high now, with first-time buyers now requiring up to 20% of a property’s value for a deposit. GoodMove’s research found that most (53%) have saved for a house deposit by themselves, with a further 34% having help from their parents or other family members to secure a deposit.

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Over a quarter (28%) of people have received money for their deposit through inheritance, 11% of Brits have taken out a loan to help them buy a home and 10% have received help from government schemes. Nearly one in ten (8%) said they have won a lot of money in the past and this helped them secure a house deposit.

When asked what the most complicated part of the home buying process was, the top reasons were saving up for a deposit (33%), finding a good mortgage deal (32%) and the mortgage application process (28%). Just 2% of respondents didn’t think any part of the process was difficult or complicated.

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Nima Ghasri, director at GoodMove, said: “First-time buyers generally have the hardest time buying a home, with securing a deposit and mortgage approvals among the hardest part of getting on the property ladder. In this campaign, we wanted to see exactly how first-time buyers and those looking to buy a home in the immediate future have bought their home and secured their deposit as well as what they found the hardest part to be.

“It’s great to see so many first-time buyers taking advantage of government schemes and also securing deposits by themselves and proves to us that the property market isn’t all that bad for first-time buyers and people can get onto the property ladder!”

Source: Property Wire

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HMRC: Highest number of February residential transactions since 2007

The provisional seasonally adjusted estimate of UK residential transactions in February 2021 was 147,050, up 48.5% annually, according to the latest HMRC Property Transaction data.

On a monthly basis the estimate is also up 23%, and these figures are the highest number for the month of February since 2007.

Looking to the estimate of UK non-residential transactions in February 2021, this was up 10.2% year-on-year to 10,630, and 25.8% higher than January 2021.

The non-seasonally adjusted estimate of UK residential transactions in February 2021 was 122,840, 48.3% higher than February 2020 and 26.4% higher than January 2021.

Non-seasonally adjusted non-residential transactions in February 2021 was 9,230, 9.9% higher annually and 27.7% higher than the month prior.

Guy Gittins, chief executive of Chestertons, added: “While there is no doubt that there are a lot of people very keen to move home, many didn’t feel comfortable starting the process until they had some idea of when the country might be out of lockdown.

“Once this was provided, we noticed an immediate uplift in new buyers registering with us, and the subsequent announcement confirming the extension of the stamp duty holiday only added to this.

“As the country emerges from lockdown, we expect moving home will be many people’s top priority; just as we saw after the first lockdown; and are therefore anticipating a very busy spring and summer market.

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“We currently have around 70% more properties on the market for sale than we did last year.

“This is good news for buyers as it means that substantial price increases are relatively unlikely for the time being and that there are generally more homes to choose from.”

David Whittaker, chief executive at Keystone Property Finance, added: “Putting these figures into context, today’s HMRC data looks at property transactions before the stamp duty land tax holiday was extended in the Chancellor’s Budget this March.

“As was speculated at the time, today’s figures confirm many purchases rushed through in February as buyers and sellers took advantage of the tax break.

“The stamp duty holiday presents an excellent opportunity for landlords looking to increase their portfolio and cash in on the tax break, however there are significant challenges to navigate as well. 2020 was a challenging year for the buy-to-let market.

“We saw a raft of regulatory changes in areas from energy rating requirements to mortgage payment tax relief and unprecedented market conditions of surging demand paired with limited capacity while working from home.

“These factors have created an unfamiliar market for even experienced landlords.

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“In these times, it is even more essential that borrowers are seeking broker support and guidance to help them secure the best product available.”

Tomer Aboody, director of property lender MT Finance, also reacted to these figures: “With the strongest housing market in more than a decade, both home buyers and investors are taking advantage of historically low borrowing rates.”These favour both those buying a property to live in and those seeking rental assets for yield, significantly boosting the number of transactions.

“With the extension of the stamp duty break, further buyers have decided that now is the time to buy with a potential saving of up to £15,000 to tempt them.

“This saving, along with high loan-to-values and cheaper mortgages, is making this a sellers’ market, with buyers waiting in the wings to pounce.

“Many are prepared to pay higher prices than the past few years so as not to miss out, which is pushing values even higher.”

By Jake Carter

Source: Mortgage Introducer

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Scottish residential property revenues and volumes up over 20%

Scottish residential property revenues and sales volumes rose over 20% in the past six months according to analysis of the latest Scottish government data by UK-wide letting firm, apropos.

The data found that completed property sales rose 23.2% and government revenue was up 20.4% from September 2020 to February 2021 compared to the same period in the previous year.

The volume of sales covering the six-month period rose from 51,030 to 62,850 while revenue from land and buildings transaction tax (LBTT) increased from £208.2m to £250.7m.

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David Alexander (pictured), joint chief executive officer of apropos, said: “September was the first month to show the impact of raising the LBTT threshold and this data highlights just how successful this policy was over the following six months in kick starting the property market through what could otherwise have been a fairly moribund period.

“The four-month period from September to October showed the highest volume of completed transactions since LBTT was begun and the greatest revenues received by the Scottish government.”

“There is little doubt that these record figures for transactions and revenues would have continued if the threshold for paying LBTT had continued for longer. Individual home buyers have benefitted from this policy and the Scottish Government has benefitted from an additional £42.5m which it would otherwise not have received.”

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“The ending of the stamp duty holiday at the end of March is clearly already having an impact on sales (both January and February numbers are nearly 50% lower than December) and I would expect the March figures to be static and then a sudden dip in volumes and consequent fall in revenues for the Scottish government in April and beyond.

“Despite widespread support from homebuyers and the property market the Scottish government remains intransigent on maintaining a policy which directly benefits individuals and raises essential funds for their coffers at this difficult time for the economy.

“Despite this win-win tax reduction the Scottish government seems disinclined to maintain a popular and successful policy even though the Westminster Government is sustaining their stamp duty saving for a further six months. We shall see how much of a disadvantage this produces for the Scottish homebuyer and the wider housing market in the next few months.”

Source: Property Wire

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UK housing stock now worth a record £7.56trn

The total value of the UK’s housing stock has hit a record high of £7.56trn despite the pandemic and prevailing economic uncertainty, according to Savills.

The total UK housing value, which rose £380bn compared to 2019, now stands at four times the value of all companies in the FTSE 100.

The value of housing in the North of England saw its strongest growth since 2005 with a £59bn gain, while London and SE account for around £1.8trn and £1.4trn respectively, an increase of 23% and 18% of the total.

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The value of mortgaged owner occupied homes passed £2.5 trillion for the first time, driven by support from the Bank of Mum and Dad, longer mortgage terms, and the support of Help to Buy, Savills reported.

The mortgage guarantee scheme announced in this month’s Budget will boost this figure further.

Lawrence Bowles, a director in Savills residential research team, said: “People reassessed their housing needs and preferences as a result of the pandemic and that drove a surge in transaction activity in the second half of last year.

“This triggered rapid price growth as many buyers who felt secure in their finances looked for larger homes to accommodate the multiple demands of home working and home schooling, as well as extra space for living and leisure.  It also meant that the total value of properties held with a mortgage rose by 6.9% as people stretched their borrowing to accommodate lifestyle demands.”

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Total value% growthIn 2020Value gainIn 2020
London£1,765bn6.1%£101bn
South East£1,420bn4.9%£66bn
East of England£855bn4.7%£39bn
South West£706bn6.2%£41bn
North West£561bn6.2%£33bn
West Midlands£508bn4.9%£24bn
East Midlands£418bn5.5%£22bn
Yorkshire and the Humber£411bn5.0%£20bn
Scotland£390bn4.5%£17bn
Wales£245bn3.8%£9bn
North East£158bn4.4%£7bn
Northern Ireland£117bn3.2%£4bn
United Kingdom£7,555bn5.3%£380bn
Source Savills Research using ONS, Land Registry, MHCLG, UK Finance

By MARC DA SILVA

Source: Property Industry Eye

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Value of new mortgage commitments reach highest level since 2007

The value of new mortgage commitments was up 24.2% annually to reach £87.7bn, and is at the highest level since 2007 according to the Financial Conduct Authority (FCA).

The quarterly mortgage lending statistics data also shows that the outstanding value of all residential mortgage loans was £1,541.4bn at the end of Q4 2020, 2.9% higher than a year earlier.

The value of gross mortgage advances in Q4 2020 was £76.6bn, 4.2% higher than in Q4 2019.

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Since the beginning of 2007, am estimated 340 regulated mortgage lenders and administrators have been required to submit a Mortgage Lending and Administration Return (MLAR) each quarter, providing data on their mortgage lending activities.

The FCA and the Prudential Regulatory Authority (PRA) both have responsibility for the regulation of mortgage lenders and administrators so this data publication is joint.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “The highest volume of mortgage commitments since 2007 has been fuelled by the stamp duty holiday.

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“It not only means that brokers will have a very healthy pipeline of business throughout the start of this year but also there is plenty of momentum in the market.

“The stamp duty holiday extension until the end of June should help to maintain high volumes but brokers need to be mindful of the time it takes for offers to complete. New buyers or movers need to have contingency plans in case they miss the June deadline and are faced with a tax bill.

“The huge numbers in Q4 have been fuelled mainly by movers and first time buyers but there is still a large market out there for remortgage business.”

By Jake Carter

Source: Mortgage Introducer

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Details of new 5% deposit mortgage scheme to be outlined in Budget


Ultra-low deposit mortgages are set to make a comeback with a new 5% deposit home loan guarantee scheme.

Details about the new scheme are expected to be set out in Chancellor Rishi Sunak’s Budget on Wednesday.

The scheme will be available to current homeowners as well as first-time buyers looking to buy a house for up to £600,000.

The initiative will be available to lenders from April and is designed to increase the appetite of mortgage lenders to offer high loan-to-value lending to creditworthy customers across the UK.

Under the scheme the Government will offer to take on some of the risk of low deposit loans, meaning lenders would have some protection from potential losses.

Low deposit loans are often seen as more of a risk because borrowers could end up in negative equity if house prices fall – meaning they owe more than their property is worth.

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Lenders will be able to purchase a Government guarantee that compensates them for a portion of their losses in the event of foreclosure.

All lenders under the scheme will offer mortgages fixed for at least five years as part of their range of products, providing options for consumers with smaller deposits who want the security and predictability of a mortgage with a fixed rate over a longer term.

The new initiative follows in the footsteps of the UK-wide Help to Buy mortgage guarantee scheme, which was launched in 2013 and helped to reinvigorate the market after the 2008 financial crisis.

That scheme, which also offered 5% deposit mortgages, is no longer running.

It helped more than 100,000 households across the UK to buy a home, but it also drew accusations of pumping up property prices.

Many low deposit mortgages vanished from the market last year amid concerns about the wider economy.

However, more recently, lenders have been bringing back low deposit deals, clustered around the 10% deposit level.

For example, Yorkshire Building Society launched two new 10% mortgages on Wednesday exclusively for first-time buyers.

In recent months, house prices have jumped to record highs, fuelled by buyers wanting to move to make lifestyle changes, as well as a temporary stamp duty holiday.

The stamp duty holiday is due to end on March 31, but it could be extended by another three months in the Budget, according to recent reports.

Rightmove estimates that 100,000 buyers who agreed a purchase last year are set to lose out if the deadline remains at March 31.

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In total, it estimates an additional 300,000 property transactions in England could get through if the deadline is extended to June, saving buyers £1.75 billion in total.

Rightmove’s property expert Tim Bannister said: “We estimate that around 100,000 sales will miss the current March deadline, and so if the holiday is extended to the end of June it would give these the chance to complete in time, plus a number of other sales could now make it through that were only agreed at the start of this year.”

Kate Eales, head of regional residential agency at Strutt & Parker, said a possible extension “is likely to motivate potential buyers who thought about entering the market but might have been put off by lockdown restrictions and felt they had already missed the boat with this holiday altogether”.

She added: “An extension, combined with the recent Government road map to normality, is likely to work together to encourage more to come to the market and take advantage of the holiday.”

Prime Minister Boris Johnson said previously: “I want generation rent to become generation buy and these 95% mortgage guarantees help to deliver this promise.

“Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get on to the property ladder.”

Mr Sunak said previously: “By giving lenders the option of a Government guarantee on 95% mortgages, many more products will become available, helping people to achieve their dream and get on the housing ladder.”

Source: Express and Star

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Mortgage borrowing remains high in January – Bank of England

Net mortgage borrowing remained at £5.2bn in January, according to the Bank of England’s Money and Credit statistics for January 2021.

This is up from the monthly average of £4bn in the six months to February 2020.

The statistics also show that there were 99,000 mortgage approvals for house purchase in January, in line with the average of 100,000 since October 2020.

In addition, effective interest rates on new mortgage borrowing fell to 1.85% in the first month of the year.

That is in line with the rate in January 2020, and compares with a series low of 1.72% in August 2020.

The rate on the outstanding stock of mortgages fell to 2.09% which is a new series low.

David Whittaker, chief executive of Keystone Property Finance, said: “Today’s statistics show that the housing market remained resilient as the New Year kicked off, with demand for property continuing to rise as people take advantage of low interest rates and the stamp duty holiday.

“However, it’s clear that mortgage transactions are beginning to slow as the impact of the third national lockdown on consumer confidence and uncertainty about the future of the stamp duty holiday takes hold.

“In addition, while demand for property has remained strong, data shows that the supply of new property has decreased since the beginning of the year.

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“As well as navigating this unprecedented market, buy-to-let borrowers have an added challenge of dealing with recent and upcoming regulatory changes.

“As such, the value of advice for landlords cannot be understated.

“The role of mortgage brokers has never been more important in helping landlords understand this shifting landscape and find the right mortgage for them and their individual circumstances.”

Joshua Elash, director of property lender MT Finance, added: “There is an astounding level of liquidity in the market at a time when the economy itself is in a state of partial paralysis. It is unusual and feels dysfunctional.

“Consumer borrowing is down, as lockdown continues to bite into people’s ability to go out, shop, and enjoy the things in life we usually take for granted.

“This new reality has meant that households continue to deposit savings at remarkable levels, given that interest rates are at historically low levels.

“Net mortgage borrowing is also robust, encouraged by the stamp duty holiday and effective interest rates as low as 1.85%.

“With the Chancellor rumoured to be rolling out a mortgage guarantee scheme, which will see the return of higher loan-to-value deals, this trend will continue, leading to serious inflation in property prices.”

Islay Robinson, group chief executive of Enness Global Mortgages, said: “These latest mortgage approval numbers highlight a market at its most buoyant in the month of January since before the financial crisis of thirteen years ago.

“Activity is far higher than normal levels and this has no doubt been driven by the current stamp duty holiday.

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“Homebuyers are shrugging off any fears of a pandemic property decline in their rush to secure a stamp duty free purchase.

“This frenzy looks likely to continue until summer, given Rishi Sunak’s potential pending announcement of an extension via Wednesday’s budget.

“The question for sellers, estate agents and mortgage brokers is, ‘what happens once the levy is reinstated?’

“We may be about to take a step back from the cliff-edge should the stamp duty holiday be extended.

“However, this is only prolonging the inevitable and, if anything, will only steepen the gradient of any potential market decline.

“We should perhaps make the best of these ‘sunny days’ whilst we can before another stamp duty deadline countdown leaves us teetering on the edge once again.”

Iain McKenzie, chief executive of the guild of property professionals, added: “Despite January traditionally being a slower month for purchasing a home, these figures show the stampede to buy property before the stamp duty holiday ends.

“It is good news for the wider economy that there is still interest in moving up the property ladder and consumer confidence in mortgages is still robust.

“Consumers are also repaying debts at an incredible rate, which can be partly ascribed to the savings that many employees are making by working from home.

“However, this could also indicate a lack of confidence in how the economy will fare this year, as people are choosing to pay down debts rather than spending the extra cash.

“Interest rates on mortgages are some of the lowest we’ve seen in a long time, and this could be another strong year for the housing market.”

By Jake Carter

Source: Mortgage Introducer

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New mortgage guarantee scheme set to be announced in Budget

A mortgage guarantee scheme to help prospective homeowners with smaller deposits onto the property ladder is set to be announced in the Budget on Wednesday 3 March.

The government will offer incentives to lenders in order to bring back 95% LTV mortgages which were removed from the market as a result of the pandemic.

According to The BBC, the scheme will involve the government offering to take on some of the risk that comes with low-deposit mortgages in order to bring them back onto the market.

The new scheme will reportedly not be limited to first-time buyers but there will be a maximum property limit of £600,000, and will be offered from April.

No end date for the scheme as been confirmed.

The scheme is based on the Help to Buy mortgage guarantee scheme which ran until December 2016.

Mark Harris, chief executive of SPF Private Clients, reacted to the news: “Turning ‘Generation Rent’ into ‘Generation Buy’ has been a focus for Boris Johnson for a while so the return of 95% LTV mortgages for first-time buyers doesn’t come as a complete surprise.

“This, coupled with the extension of the stamp duty holiday, will result in a Budget which is a real boost for buyers.

“It is positive news for first-time buyers, particularly as it is not restricted to new homes, although critics may argue that it will only aid house price inflation.

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“But without such a scheme would developers be so keen to put spades in the ground?

“The supply of new housing is nowhere near where it needs to be to satisfy demand.

“For those with little in the way of deposit, finding a 95% LTV mortgage has been pretty much impossible in recent months.

“The odd building society here and there has offered them, with Saffron building society launching at 95% LTV in June but it only lasted a matter of days.

“Furness BS also has a selection of 95% products but these are restricted to certain postcodes.

’The only other current option to obtain a mortgage at this level is to call upon a third party, typically a parent, to provide extra security in the way of deposits or equity within the ‘guarantor’ property.

“Not everyone is in a fortunate position to do so.

“The last time there was a mortgage guarantee treasury scheme was via Help to Buy.

“The mortgage guarantee offering closed to new loans on 31 December 2016 (the equity loan continues, albeit in a revised form today) but by then, many of the high-street names had removed themselves from the scheme and ‘self-insuring’ their 95% offerings.”

Rightmove put together the latest figures on asking prices and how many properties could be eligible under the scheme.

Their data found that 86% of properties up for sale have an asking price of £600,000 or less, with the national average asking price for all properties standing at £318,580, a 3.0% increase from February 2020.

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The national average asking price of a first-time buyer property is £200,692, which is 3.6% higher than February 2020.

Since the Help to Buy mortgage guarantee scheme was first launched in 2013, national asking prices have increased by 29% from £246,748 in October 2013 to £318,580 in February 2021.

Mark Hayward, chief policy adviser at Propertymark, added: “A government backed mortgage guarantee scheme will help first-time buyers get on the housing ladder at a time when for many owning a home seems an impossible dream.

“Alongside the potential extension of the stamp duty holiday that we have been calling for, this new scheme will go some way in giving some hope to first-time buyers at a time when the size of deposits required means they fall at the first hurdle.”

By Jessica Nangle

Source: Mortgage Introducer

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Residential transactions remain high as SDLT holiday deadline is approaching

The number of UK residential transactions, on a seasonally adjusted basis, rose by 24.1% between January 2020 and January 2021, according to the latest property transactions data by HMRC.

This annual rise comes as the stamp duty holiday deadline fast approaches on the 31 March.

Despite the annual rise, on a monthly basis the number of residential transactions dropped by 2.4%.

Looking to the number of non-residential transactions in the UK during January, this figure fell 8.2% year-on-year to 8,980.

In addition, between December 2020 and January 2021, the number of non-residential transactions declined by 3.6%.

The provisional non-seasonally adjusted estimate of UK residential transactions in January 2021 was 98,830, 17.9% higher than January 2020 and 25.2% lower than December 2020.

Furthermore, the non-seasonally adjusted estimate of UK non-residential transactions in January 2021 was 7,680, 14.6% lower than January 2020.

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The data also shows that the level non-residential transactions was 28.0% lower than December 2020.

Mike Scott, chief analyst at Yopa, said: “New figures from HMRC show that the number of home purchases completed in January was still very high, as buyers rushed to beat the 31 March stamp duty deadline.

“We expect that the number of purchases will remain very high until March, and then drop off for a few months before returning to normal.

“The year as a whole is likely to see a higher number of purchases than in recent years, perhaps as high as 1.3 million.

“The housing market has remained open during the recent and current lockdowns, but many people are still waiting for life to return closer to normal before they make their next move.

“After a brief slowdown in the second quarter after the stamp duty holiday ends, we anticipate a very active housing market in the second half of this year.”

David Whittaker, chief executive of Keystone Property Finance, added: “Today’s figures suggest that home buyers who are unlikely to make the stamp duty holiday deadline are taking a ‘wait and see’ approach to purchases, delaying applications until the Chancellor providers greater clarity over the future of the tax holiday.

“However, despite the uncertainty, second properties are making up a significant proportion of the continued rising demand.

“Data from Hamptons International reveals second home sales increased by 58% in January 2021 compared to the same month last year.

“This follows a period of buoyancy in the buy-to-let market as landlords look to expand their portfolios, while taking advantage of an increasing number of buy-to-let products on the market.

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“However, being a landlord brings with it a series of challenges, not least the recent and upcoming regulatory and tax changes.

“Qualified advice from mortgage brokers is crucial in helping landlords to navigate the market and access the right mortgage for their unique circumstances.”

Nick Barnes, head of research at Chestertons, said: “Following a record December, the sales market has maintained momentum throughout January 2021.

“Compared to January last year, Chestertons registered 9% more instructions, indicating that sellers remain keen to move home.

“This is further highlighted by a 47% year-on-year increase in properties currently on the market.

“Equally, we have agreed 27% more sales, largely driven by house hunters rushing to meet the stamp duty holiday deadline but also possibly reflecting a desire to beat any potential shutting down of the housing market as proposed by the Labour party.

“In spite of lockdown restrictions, there are still plenty of households who are keen to move, which is further boosted by the roll-out of the vaccine.

“Boris Johnson’s announcement of the slow easing of lockdown restrictions might bring a new spark to the housing market as people are eager to return to some form of normality.

“So far in February, Chestertons has seen a 73% increase in sales compared to the same period in February 2020.”

By Jake Carter

Source: Mortgage Introducer

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