Cost of London homes reach an all-time high, now at £501,320, as homebuying spree expected to continue until June
With London’s residential property buyers taking full advantage of the stamp duty holiday, house prices touched an all-time high in January.
The average cost of a home in the British capital soared to £501,320, or 0.1 per cent higher than what we saw in December 2020, and 5.3 per cent higher than January 2020. Ever since the lockdown restrictions were eased last May, house prices have been steadily increasing.
This trend can be attributed to the Chancellor of the Exchequer Rishi Sunak’s stamp duty waiver scheme for the first £500,000 of all residential property deals. The move was welcomed by most real estate stakeholders, and by early February, 10 Downing Street was forced to consider an extension of the March 31 deadline.
Now that the deadline for the stamp duty holiday has been extended until June, it is safe to assume that buying interest in London homes will continue to ride high.
Jame Pendleton’s managing director, Ewen Bunting, points out that the sales price is at 99.4 per cent of the asking price after the Budget session ended. He adds that this is the first time in the last five years when property dealers have got close to getting their desired price for residential units.
In May last year, there were concerns of real estate vendors not passing on the stamp duty benefits to home buyers. But that didn’t happen, and the market remained buoyant, making it a win-win situation for both parties.
February of 2021 saw a surge in demand and robust valuations as buyers were in a rush to meet the March deadline. With a seller’s market like this, more units are expected to be swooped up at the asking price or even higher.
Gatehouse Bank’s chief commercial officer, Paul Stockwell, had a few other observations to make. He says that some sellers may hold off their plans of selling properties due to the risk of spreading the coronavirus. It means that process could continue to rise even as we enter the spring season.
Tomer Aboody, a director at MT Finance, says that the “historically low borrowing rates” is favouring everyone who is looking to purchase a house at the moment. Whether it is an investor who is looking for assets with a good rental yield or a home buyer looking for a place to live in, both stand to benefit from the current interest rates.
The government even stepped in to offer a respite with a mortgage guarantee of 95% for first-time buyers.Mark Harris, the chief executive of SPF Private Clients, has a behavioural aspect to point out. After reading into the data, he highlighted the potential of the uptick seen in the Bank of England’s housing figures. He further adds that the lockdown experience, the desire for a more spacious dwelling, and the record low borrowing rate have positively impacted the housing markets.
