Activity in the property market slows down in the last quarter of 2020 to recover next year
Buying activity is likely to be strong in the first quarter of 2021, as households look to take advantage of the stamp tax holidays and Help to Buy, UK Finance’s Home Finance Review.
However, the second wave of lockdowns is likely to affect activity in the last quarter of 2020.
Loans recovered in the third quarter from the second.
“2021 will be essential for the property market.”
Eric Leenders, UK Finance Managing Director of Personal Finance, said: “In the third quarter of 2020, the economic and logistical impacts of the lockdown eased somewhat, facilitating a strong rebound in the housing market; however, recent additional regional closures and tighter restrictions may curb this to some extent.”
“As the stamp tax holiday and the current Help to Buy schemes come to an end at the end of the first quarter of 2021, the demand for mortgages is likely to increase in the coming months; beyond that, the prospects are uncertain.”
Tomer Aboody, director of real estate lender MT Finance, said: “The market performed solidly in the third quarter, which is no surprise considering the liquidity of the lenders and the government support through the licensing scheme, help for buy, the bank ring holiday to offer higher value mortgages.”
“How all of this will potentially change in March is a concern, and the government must be cautious not to allow confidence in the market to dissipate, as the licensing scheme ends at the same time as the suspension of the stamp tax.”
“Research has shown that stamp duty savings were likely paid for through an increase in property values. But with mortgage rates at record lows, home buyers are taking on affordable debt. Therefore higher values are being managed within mortgage payments.”
Jeremy Leaf, North London Realtor, and former RICS Residential Chairman said: “These figures, while a bit dated, are interesting not only because they represent a useful indicator of future activity, but they clearly demonstrate how the housing market challenged the recession in the rest of the economy just a few months ago.”
“Driven by the stamp duty holiday and suppressed demand after closing, buying and selling shows little sign of abating, although we are certainly in a calmer period now as many have taken advantage of the concession and seasonal concerns are taking priority.”
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