FURTHER DROPS IN MORTGAGE RATES OCCUR THIS MONTH, REACHING LEVELS BELOW 1%.
Property Market Update
When the lockdown was enforced on 24th March 2020, few would have forecast the economic outcomes that have occurred. From the property markets perspective, we have seen its most sustained annual growth for nigh on a decade, which has been driven by a febrile combination of swelling personal balance sheets as reduced spending has led to greater saving, the perceived need for more space and the availability of cheap mortgage funding.
Just as we feel mortgage rates cannot possibly get any cheaper, further drops occur with a number of providers offering rates at a level below 1%.
We now approach 30th June when the stamp duty (SDLT) holiday will start to taper, before finally ending on 30th September. According to data supplied by Rightmove, 704,000 buyers across the country are racing to secure completion prior to the deadline and this is placing a huge strain on the system as solicitors and lenders battle to get these deals completed on time.
To put that into some kind of perspective, the previous monthly high was 428,633. It is an unprecedented situation, and we are seeing the effects of the deadline most acutely from the lender’s point of view where response times are much longer than normal, which is slowing the process from the point of application to receiving the mortgage offer.
Post 30th June (SDLT Deadline)
The tax break has undoubtedly distorted the market with a huge number of transactions taking place over a short period of time when under normal circumstances, the completion dates would have been spread over the next 6-8 weeks.
There is no doubt that all those involved in the industry will pause for breath on 1st July but based upon our research and the conversations we are having with clients, demand shows no sign of declining.
The combination of low supply and cheap funding coupled with strong demand on the buy-side will likely see strong performance across the remainder of 2021 and into 2022. The successful rollout of the vaccination program in the UK has supported confidence despite the delay in the easing of restrictions. As we approach July, we appear on track and expectations are high that a return to a more normal way of life is now very close, as we see more and more clients start to return to their offices on a regular basis.
That said, the last 15 months will have a lingering impact and clients are still mindful of changing requirements in terms of their set-up at home. Home offices, greater outside space and homes in the country are still very high on our clients’ agendas and it is highly likely that it will be some time before these trends show any sign of reversal.
This month also saw Henry Dannell celebrate our second anniversary and we would like to take this opportunity to thank you for your tremendous support. The team has grown significantly over the past 2 years as we continue to strive to provide our clients with the best service and high-quality advice. It has been an eventful time for all of us but the Henry Dannell team will continue to strive to put our clients first and focus on achieving the best possible outcomes for you. Do not hesitate to get in touch, and we look forward to hearing from you.
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Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.