2021’s set to be recorded as the busiest year in the property market in 14 years according to research carried out by property website Zoopla, with data showing 1 in 16 properties will be sold by the end of the year.
This thought to be largely due to the recent Stamp Duty holiday, ended on 30th September, coupled with the easing of COVID-19 restrictions. Zoopla has commented:
“2021’s property market will be defined by the pandemic-led re-evaluation of the home, with many households compelled to make a move”.
It appears the end of the Stamp Duty holiday has done nothing to slow down the market.
House prices are said to have risen at an annual rate of 6.9% in October, double the rate recorded in October 2020. A high number of buyers in the market, combined with a shortage of homes for sale due to demand, has increased the average house price to £240,000, compared with £200,000 just five years ago, price growth is said to continue in 2022.
The Bank of England have revealed plans to relax mortgage affordability rules, welcome news to first time buyers many of whom have faced being priced out of the current market with typically lower salaries and smaller deposits.
Currently, new borrowers must show they would be able to afford the repayments if their mortgage reverted to their lender’s higher variable rate and interest rates to 3%, to test if they would be able to keep up with payments if rates increased. But the Bank’s Financial Policy Committee (FPC) has decided this rule is no longer needed. It is due to consult with mortgage lenders and other financial industry parties early next year about withdrawing the 3% interest rate test.
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