UK housing market activity is slowing after the surge to beat the stamp duty holiday deadline, while the latest coronavirus lockdown is also having an adverse impact on the sector, according to Chestertons.
The company’s latest figures show that 12% more property purchases were agreed over the course of the month compared to January last year and 47% more than December. The firm also saw 28% more deals contractually finalised than in January 2020.
However, while there are more sales being agreed, the stricter lockdown measures have clearly discouraged many would-be buyers from entering the market. Chestertons saw the number of new buyers registering drop by 23% compared to January 2020.
Many sellers with their properties currently on the market are keen to secure a sale before the stamp duty holiday deadline in March and have been quick to react, with over 10% of Chestertons’ sellers dropping their asking price in January. Chestertons currently has nearly 50% more properties for sale compared to January 2020.
Guy Gittins, CEO of Chestertons, comments: “It is clear that the unprecedented levels of buyer activity that we saw in the second half of last year has cooled. This is primarily due to the stricter lockdown measures discouraging people from continuing their search and the fact that the chances of beating the stamp duty holiday deadline is now slim for those that have not yet found a property.
“However, the extraordinary amount of buyer interest we saw towards the end of last year is still converting into record levels of agreed sales as people are pushing hard to get the purchase completed as soon as possible in order to take advantage of the stamp duty saving and to enable them to adapt to the current circumstances.”
Despite the fact that demand is softening, Gittins is optimistic that the housing market will enjoy another post-lockdown mini-boom once the current coronavirus restrictions are lifted.
He added: “There is clearly still a lot of confidence in the market and a lot of people wanting to move and we are very confident that the market will pick up very quickly once lockdown restrictions start to relax.”
No it won’t not until the cladding issue is resolved.
Flat owners need to be able to sell before moving to houses.
With millions of currently worthless flats the housing market is going nowhere.
It will remain a market only for those with houses to buy and sell.
All flats are currently worthless.
Having such a major part of the property market currently worthless will have a major effect on it.
The UK has never experienced such a situation ever before.
It is equivalent to the bombed properties of the war.
In that situation Govt invested money to rebuild those destroyed properties.
Govt need to do the same for these flats.
They have effectively been bombed as they are currently worthless until repaired.
Govt needs to invest in remediating all these worthless flats.
It will effectively be investing in the future of the property market.
Taking all the worthless flats off the market won’t do the Govt any favours at all.
Restoring value to those flats is desperately needed.
Only Govt can afford to do this.
Indeed it cannot afford not to do so!
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Agree the Govt do need to step in and then recoup from the parties at fault (which is not the Leaseholders) – on a sobering webinar from ARMA yesterday which suggested even if the works started today, given the number of buildings likely involved (as all have not been even surveyed yet) and available expertise/contractors that it would take at least 5 years to complete works on all affected buildings.
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Even as you suggest an optimistic 5 years to remediate that is better than current Govt proposals. It has been presiding Govts responsible for the failings in the construction industry. It should not be the little innocent leaseholder that should pay for all these failings. Govt should do the right thing and recover from the guilty over a period of years. Govt priority should be to restore the UK property market to normality. That means remediating ALL properties so they pass an EWS1 form.. This is fundamental to ensure all properties have a mortgageable value. Without this it will be a disaster.
If lian values are effectively destroyed by worthless flats then lebders will gave ro make massive provisions.
That leaces far fewer funds to lend.
It xould mean Govt having to inject billions of liquidity into banks to maintain mortgage lending capability. The politicians have failed to grasp the reality of the situation. Boris needs to take charge of this situation stating that the State will do whatever it takes to ensure all flats etc are mortgageable. It is not the leaseholders that are to blame for the situation they are currently in Boris needs to take responsibility for Govts past and present and pay for all remediation costs.
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I think that to say “All flats are worthless” is overstating the situation. Flats with cladding issues are virtually worthless & certainly unmortgageable. Those without cladding issues are still of value and are being bought & sold in the market. In Manchester a lot of flats for sale are only for cash buyers so presumably these have cladding issues – although Estate Agents don’t mention this in their advert it is only when you ring to make an enquiry they tell you this. At the SDL Online Auction last week a flat with cladding issues failed to sell. The seller bought for £170k and the guide was £125k. The legal pack revealed an EWS1 with combustable cladding identified, a S20 Notice had been issued but not costed, buildings insurance premium for 2020 of £489k up from £35k in 2019 – so not surprised it went unsold.
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Nonsense – these sweeping statements are not correct, or helpful.
The market where we are is good and properties are still selling, more often than not over asking price. This might not be the norm, but just shows that the above isn’t necessarily either.
Also the Stamp Duty issue, the extension of the holiday or the slower fazing out, is not known either.
If anyone thinks that the market is suddenly going to sky rocket post-lockdown without knowing when that may be, judging the whole nation as one, and effectively guessing the Stamp Duty outcome, they are simply guessing to get their name in print somewhere.
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There are those flat owners who want to move to a house but can’t.
The SDLT is a minor issue.
It is the cladding issue that is the most important problem to affect the whole property market.
Until there is a roadmap to resolution the property market will be very limited to house owners only.
The market depends on flat owners being part of the normal property market.
Flats are a major component of that market.
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My comment was aimed at the article, and not yourself.
Cladding is a problem yes, and for those owning a property in a clad building, they are in trouble short-term, but let’s not pretend that has, or will, suddenly collapse the housing market.
You say “limited to house owners only” – simply not true … there are literally 1000s of flats without cladding under offer and processing sales on them as I type readily available on the various portals.
On the article itself. It’s little more than free PR.
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It is irrelevant whether a flat has cladding or not.
As far as I am aware ALL lenders are requiring an EWS1 form which passes the building as a whole before they will lend on any of the flats.
I wouldn’t buy a flat for cash if it was for £1.
Cash only idiots are welcome to take the risk.
I certainly wouldn’t.
I would only invest capital in a property asset that I knew for certain was mortgageable.
Which is why I wouldn’t currently buy any flat UNLESS it had achieved a satisfactory EWS1 form.
Your larger point of SDLT will I believe occur.
The heat will immediately dissipate from the market which will then just bumble along being severely constrained by the flat cladding issue.
There is simply no way leaseholders will bother to afford the remediation costs.
They will just go bankrupt if they can.
Many will have their livelihoods destroyed.
I am planning for bankruptcy myself.
I won’t have any traceable assets at all.
Not many are in such a position as me to achieve this.
They will find the OR takes everything from them.
Politically this Tory Govt cannot hangout to dry so many homeowners.
It must pay the remediation costs and then recover from the ones responsible for the debacle.
If one has shares in Barratt etc I’d sell them pronto!!!
Govt will have to hit them hard for their incompetent construction.
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Apparently Fleet Mortgages now won’t lend at all on flats if an EWS1 form is needed due to there being some many fake forms in circulation.
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Man buys clad flat to let pre-inferno and wants government to bail him out. Ok. but then claims the whole housing market depends on the sale of clad flats…… Not in vast areas of the country it doesn’t. Probably largely limited to large urban areas.
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Cladding hasn’t anything to do with flats now. Lenders require an EWS1 form for every flat IRRESPECTIVE of how it is constructed. Cladding is but one issue affecting flats. There is no way I would ever invest in a flat again. Too many issues in my experience compounded by this latest cladding debacle. I’ll happily leave flat investment to other LL. I wish them very good luck!! Now all I need is a mug LL cashbuyer to buy my 4 at full retail price. They would be welcome to them!
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No they dont, plenty of low rise non clad flats are going through to mortgage purchasers. Both BTL and Owner Occupiers
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I sympathise with anyone owning (or living in) a flat with combustible cladding. The insulation materials used in these tower blocks should have been regulated by BRE and the Building Control departments of Local Councils, so they are culpable. Buyers, as laymen would not be expected to have the knowledge to question the building’s specifications, so the Government will no doubt have to pick up a large chunk of the cost.
Thankfully we have no modern 18m tall blocks of flats within 50 miles, so this will not affect the local property market and the current Land Transaction Tax (Stamp Duty) in Wales gives a maximum saving of £2,550 so this will have little affect in April. The biggest problem going into Spring is the extreme shortage of properties available for sale or to let in Mid Wales, which combined with people wanting to escape to peaceful rural areas will see prices continue to rise in 2021.
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