There’s good news for sellers who thought they’d missed the boat and buyers whose FOMO convinced them to join the frenzy in June, thinking July’s dramatic fall in property sales was just the initial drop of a steep plunge.
HMRC has finally published its monthly property sales figures for August 2021. It appears the drop in property sales in July was a blip rather than a full stop. So, where does this leave buyers and sellers?
Why is the property market booming?
High demand continues to outstrip supply, and it’s fuelled a property boom that’s raised house prices to record highs. Surprisingly, rising house prices haven’t deterred buyers. The need for space, low mortgage rates and government schemes helping first-time buyers onto the property ladder have all increased demand.
There was a significant increase in demand in the months following the announcement of the mortgage guarantee scheme and the extension of the Stamp Duty holiday. Record low mortgage rates and government homeownership schemes have also made it possible for buyers and investors to afford properties.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, explains: “It goes to show that the ongoing game of musical houses isn’t over, as some of those living within commuting distance of city centres make a break for the country, those in the centres take a step to the outskirts, and new buyers move into their vacated flats.
“This has all been supported by mortgage rates, which are still at historic lows, so buyers are able to lock in a rate that makes a move affordable.”
Additionally, the lifting of lockdown restrictions, the success of the vaccination programme and the need for properties with more space is bringing more confidence to the sector.
Will property sales drop in Q4 of 2021?
August property figures come as good news and sweet relief for sellers who felt they missed the boat after July’s drop. Demand for homes is still on the rise, with buyers taking advantage of government incentives and low mortgage rates to buy more spacious homes.
Yes, there was a temporary drop in property sales in July 2021 due to the end of the Stamp Duty holiday. And yes, this could suggest another slight drop in property sales in October, when the tapered Stamp Duty holiday finally ends. However, it’s unlikely to be as significant as July’s drop.
That said, if mortgage rates remain low and housing supply continues to increase, property sales could continue to rise.
Is now a good time to buy a house in the UK?
It’s arguably a sellers’ market at the moment, with house prices soaring in their favour. But there are many opportunities for buyers as well, and it may be a great time to take advantage. However, the ideal time to purchase a property is when your personal financial situation comfortably allows you to do so.
Review your finances first. You can use our mortgage calculator to see whether you’re in a position to afford a mortgage. It might also be helpful to check your debt-to-income ratio before you consider making a move in the housing market.
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