When Will the Housing Market Stop Growing?Posted: 13th April,2021
When will the housing market stop growing?
Residential property sales market increased last month, thanks in part to the stamp duty extension, however there is worry that the housing market momentum may be short-lived.
The March 2021 RICS UK Residential Survey results show sales market activity picking up sharply over the last month, with indicators on enquiries, sales and new instructions all improving year-on-year. But some commentators feel that the recent pick-up in the housing market may come to an end.
Analyst Anthony Codling, of PropTech platform Twindig, said “It is telling that the latest RICS UK residential housing market survey highlights the extension of the stamp duty holiday as a significant driving force behind the renewed momentum of the housing market. Activity within the housing market and prices had started to decline as the stamp duty deadline approached, but the stamp duty extension was a shot in the arm for the UK housing market.
“Short-term stimulus packages do not provide the answer to the long term nature of the housing crisis we find ourselves in, they exacerbate the highs and lows rather than providing a path to market equilibrium. With lockdown easing, have we missed an opportunity to take a long and hard look at how to fix our broken housing market whilst we had pressed the pause button on the wider UK economy?”
While the housing market is growing comfortably, and there is a higher interest for buyers and sellers it’s safe to say this is not the case for a large proportion of aspiring homeowners across the UK, according to Nigel Purves, CEW of Wayhome, “Even with the stamp duty extension for an extra three months spurring on hopeful home buyers, there are many who find themselves overlooked and ignored due to their household income not meeting a mortgage lenders criteria. This is despite them already having a deposit saved and being able to afford the equivalent of mortgage repayments in rent each month. More needs to be done to level the playing field and provide people with alternative routes into home ownership.”
Tahir Farooqui, CEO of Canopy, said: “Just as buyer demand was beginning to cool, the housing market has once again been kicked into life. Early March saw the extension of the stamp duty holiday, causing a fresh wave of demand from people looking for a new home and hoping to benefit from slashed costs. This is however causing an artificial inflation if house prices across the UK as sellers seize the opportunity to up asking prices and buyers compete for available homes in a rampant market. As a result, it’s all too easy for hopeful first-time buyers to fall behind in the race. While 95% mortgages will be reintroduced this month, the problem remains that hopeful homeowners need to be considered creditworthy enough to secure a suitable mortgage in the first place. And in a competitive market, this is even more difficult.”