The Stamp Duty holiday that drove so much demand in the residential property market since July 2020 has finally ended with a last flurry of transactions ahead of the deadline at 11.59 p.m. on September 30th.
So where does that leave the property market? Still under-supplied with housing stock yet seeing buyers who want to move to improve their lives contacting estate agents.
That supply of buyers may actually shrink in the short term while everyone reassesses the current economic situation. How will rising energy and road fuel prices affect family budgets and how will the world of work settle down again, with those who have been accustomed to working from home having to face the commute again or permanently sitting at the dining room table as they Zoom their way through the day from one of the villages embracing Basingstoke?
If the latter becomes the norm for higher paid office workers then the rush to the countryside may continue. That could put upward pressure on house prices in villages such as Sherborne St John, Overton, or Bramley for instance, especially as the planning reforms that could have led to new builds around villages are being reassessed so the arrival of new homes is likely to be pushed back.
Younger buyers heading to the villages may change the focus on essentials. Village schools with a high OFSTED rating combined with decent fibre broadband speeds will become targets. A village shop, hall, and pub will be nice additions while the need to commute maybe once or twice a week will see the proximity of a railway station added to the mix. A garden that can accommodate a “summerhouse” home office would also help.
In the short term, however, we will not be seeing the rocketing house prices that were fuelled by the Stamp Duty holiday. People will no longer be going beyond asking price by several times the tax saving they would have made, a situation every estate agent saw and was powerless to prevent. An agent’s duty is to the seller who would once have expected to see offers start maybe 10 per cent below asking price but saw them start at asking price and then rise as interested parties climbed over each other to achieve the purchase. All agents could do was evaluate the offers and pass them to the seller.
It means that in the next few months prices will stabilise although they are unlikely to fall. The traditional busy seasons of Spring and Summer are likely to reappear. If you want to move home next year then it’s the right time to appraise the property you have and prepare for 2022. It’s also time to list the priorities for your ideal new location. You probably won’t get everything that’s on the list, so have essentials and desirables. Meet all of the former and many of the latter and there will be happy times ahead.
Ben Randall, partner, Randalls Residential estate agents