Call Us
0330 304 3040
General Enquiries

Thinking of Buying a Home?

We specialise in all aspects of Residential & Commercial Lending; we are your guiding partner throughout the borrowing process.

Get Started

Housing Market Prices Hit New Records

In a turbulent year that shows no sign of slowing down, housing prices in the UK property market have accelerated to record heights ahead of the March 2021 end to the increased stamp duty thresholds.

Nationwide reports that the average UK property now costs £227,826, reflecting a 5.8% increase.

Stamp Duty Relief in 2020

Until March 2021, properties in England and Northern Ireland are exempt from stamp duty up to the value of £500,000.

With only five months left to take advantage of this significant saving, buyers and investors are rushing to complete purchases in time.

This increased threshold is part of a package of government measures to provide relief to industries following the continued impact of the Coronavirus pandemic.

The Q4 growth represents the highest market rises since 2015, with the added benefit of Green Home Grants enabling sellers to upgrade their properties and achieve higher valuations.

The Future of the UK Property Market

While house price growth may be good news to some, it seems likely that the volume of transactions completing will slow as the quarter progresses.

Many movers are relocating as a direct response to the pandemic, with large numbers of people seeking to move away from urban city centres and look for homes in less congested locations.

Robert Gardner, Nationwide's Chief Economist, says, "Behavioural shifts appear to be boosting housing market activity as people reassess their housing needs and preferences. Indeed, our poll in September suggested that 10% of those surveyed were in the process of moving as a result of the pandemic, with a further 18% considering a move for the same reason."

However, this may potentially change, with Gardner explaining that "Activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March."

Mortgage Interest Rates & the Property Market 'Cliff Edge'

Low-interest rates are also boosting mortgage lending, with no signs that this is likely to change any time soon.

The Bank of England September Report showed:

  • Mortgage approvals of 91,500 - the highest rate since 2007.
  • Net borrowing of £4.8 billion, increased from £3 billion in August 2020.
  • Consistently record-low deposit interest rates.

Experts in the property industry remain concerned that the end of the higher stamp duty thresholds from 1st April 2021 will have a sudden impact, and potentially reverse the growth seen this year to date.

Transactions still pending in early 2021 may fall through if it seems unlikely that property sales will complete in time to take advantage of the lower stamp duty costs.

There are calls for the stamp duty deadline to be extended, which becomes particularly relevant as the country reels from the news that a new lockdown will be implemented from this Thursday, 5th November.

NAEA Propertymark is calling on the government to consider an extension, with much speculation about how the next few months will play out.

Buying and Selling UK Homes in 2020

While we cannot yet know whether the stamp duty deadline will change, or if this current boost will remain on an upward trajectory, one thing is certain - now is the best time to move.

Lenders and conveyances are struggling to cope with backlogs, with transactions taking longer given the volume of sales to facilitate. Given new restrictions on movements, it may be that November sees a dip in viewings and housing market activity.

Much depends on how the economy recovers from the pandemic, how long this second lockdown will continue for, and whether the government responds to industry calls for a stamp duty extension.

For support with mortgages, remortgages or any aspect of property financing in this uncertain climate, contact the Revolution Brokers team for independent, expert advice.


Almas Uddin

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Do you have a question?

Call us on 0330 304 3040 or
Click Here to use our online form.