Property news this week
- Landlords excelling as buy-to-let payment holidays in the minority – Only 8% of landlords have applied for a ‘mortgage holiday’ with 94% saying they have no plans to apply for one either which is great to hear, especially when you consider the millions of people that have taken residential deferrals during COVID-19. This article also highlights that the Financial Conduct Authority (FCA) has outlined additional support for borrowers with the payment deferral scheme extended for a further six months for buy-to-let and residential mortgage holders which is going to be great news going into the winter months.
- Stamp duty holidays don’t help the market, claims tax expert – This is an interesting piece from EAT covering the opinion of David Hannah, a tax expert. He refers to previous times of economic crisis where stamp duty holidays have not done much to get the market moving again and he sees it as a poor tool for managing market behavior. I get what he is saying but I think he is missing the point that the stamp duty holiday is only a piece of a larger puzzle that is used to help the housing market and has been used in this instance to help keep it going due to the severity of what the government saw us facing. In hindsight, it probably wasn’t needed as demand has played a pivotal role in keeping the housing market strong but if the government had a crystal ball, the whole COVID-19 fiasco wouldn’t be as bad as it has been. A good point David does make is that more needs to be done by the government to help get people on the property ladder. He also highlights that it is important that the government reviews this stamp duty holiday and either announces an extension or amends the tax payment date.
- Government Steps in To Help Homeowners Caught up In ‘EWS1’ Process – Long-awaited good news has finally come for some of the property owners trapped in the ‘EWS1’ dilemma. An agreement has been reached between the Government and the Royal Institution of Chartered Surveyors (RICS), UK Finance and the Building Societies Association (BSA) so owners of flats in buildings without cladding will no longer need an EWS1 form to sell or re-mortgage their property. This will give the green light for 450,000 flat owners to sell, move or remortgage their homes. This is part of a wider government-led solution to support those homeowners who have unsafe cladding on their buildings and there is definitely still a lot more to do.
- Will the 2020 housing market boom continue? – Probably my favourite article this week as it dives into what the current data is indicating and why along with Harvey Raybould’s (a property developer and investor) predictions for next year. Prices have been increasing and we know that demand, the stamp duty holiday along with a shift in buyers needs and wants have all been the driving force. We see Halifax managing director Russell Galley’s prediction that the price rise is a short-term phenomenon and that the bubble will burst soon. Nationwide also shared this view. These two tend to air on the side of caution and I can see why in this instance. In the article, a few other industry professionals are more optimistic but still predict a slowdown. Harvey’s opinion is “the over-inflated house prices cannot continue indefinitely and so at some point, around the second quarter of 2021, I believe that house prices will start to fall” which is mainly due to unemployment levels. I share the view that post stamp duty holiday and the furlough scheme, house prices will slow down, but do I think they will drop? No, not overall. Some places such as London and the South East may take more of a hit as affordability levels are already low, but in areas where affordability levels are good and the hyper-local economy is strong, I think demand will help keep prices strong. These are all, of course, opinions so it is always important to do your own research and due diligence to make up your own mind. My prediction was right about the property market when we went into the first lockdown so let’s hope I am right again.
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