It's a time like no other for the UK property market, with house sales soaring to 50 per cent above the levels recorded last year, despite rising house prices. That's an extra 140,000 house sales in various stages of completion, according to Zoopla.
This will come as potentially worrying news to buyers who are still hoping to complete by Christmas. With under two months left before the last day for completions (22 December), it's now looking highly unlikely that all of them will be in their new homes this year. The average time a house takes to sell is currently around three months, and this has been much longer in some parts of the country, particularly in the south east.
What we're seeing now is undoubtedly an uncharacteristic surge cause by the stamp duty holiday, which comes to end on the 31st March 2021. Zoopla acknowledge this by saying that 'he stamp duty deadline will focus the minds of committed movers in the near term and make for a strong first quarter of sales completions in 2021.'
However, there are early signs that the mini-boom, as it's come to be known, is coming to an end, with the number of new enquiries finally falling to pre-Covid levels over the past few weeks. This will be welcome news for first-time buyers who have increasingly been pushed-out by second- and third-time buyers with much more equity, more options where it comes to mortgages, and, currently, more cash thanks to the stamp duty relief. In fact, these confident buyers climbing up the property ladder are pushing up mortgage approval levels despite the increasingly restrictive behaviour from lenders. Managing Director of Enness Global Mortgages (opens in new tab), Hugh Wade-Jones comments:
'Prospective home buyers have continued to fuel the furnaces of the UK property market with another huge uplift in mortgage approval figures. The highest rate of approvals since 2007 tells you all you need to know about the dramatic return to form currently being seen, as buyers are returning in their droves ahead of the stamp duty holiday deadline.
'This is despite the fact that lenders have started to penalise the applications of buyers they consider to be in more changeable circumstances such as the self-employed or those heavily reliant on commission. At the same time, first-time buyers have also seen the range of products open to them dwindle with many required to stump up larger deposits to secure a mortgage.
'However, this tightening of the belt is yet to cause any dent in top-level market activity and mortgage approval figures are soaring. This growth has been maintained by a high level of deals that continue to be done by second and third rung buyers in particular.
'We’ve also seen a heightened degree of activity from international buyers and those at the very top price thresholds who have seen the improving health of the regular market as their cue to act.'
Our advice to first-time buyers? If you are at all able to wait until March, do so. The current exceptional demand is already subsiding, but it will take a good few months for all those house sales to go through the system, and for lenders and conveyancers to be under a little less pressure. That's when you should start applying for mortgages and viewing properties. However, if you want to be prepared to act quickly next year, you can start researching the best mortgage rates and get an agreement in principle now. We've teamed up with mortgage experts Habito (opens in new tab): use their free mortgage comparison tool below.