Business Update Archives - Durrants Estate Agents

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Keep the home fires burning

Managing Director and Head of Residential Sales for Durrants, Dominic Parravani comments on Mr Sunak’s budget.

In his spring 2021 Budget the Chancellor of the Exchequer, Rishi Sunak, has chosen to keep the fire under the property market well and truly alight.

The UK is now experiencing a property buying demand reminiscent of a 1970s or 1980s type boom. We know there’s a property boom when adverse events that might otherwise have knocked the market off course fail to do so. Lockdowns 2 and 3 haven’t dented the recharged enthusiasm for property purchase, which began in the first lockdown; nor have the threatened end of the stamp duty holiday or the dark cloud of a post-furlough unemployment spike.

It’s clear that the wider British public is back in love with home ownership, and the Chancellor has chosen to give that fire a further stoke. Mr Sunak has extended the stamp duty holiday from the end of March to the end of June. After this date, the starting rate of stamp duty will be halved to £250,000 until the end of September.

The Budget announcement also included a mortgage guarantee scheme to help people with small deposits get on the property ladder by offering incentives to lenders to provide 95% mortgages.

Simultaneously the Chancellor is easing the country from an end of furlough cliff edge and has turned away from increasing capital gains tax – an increase in CGT could have dented the holiday home and investment sectors. These moves point the way to a lively property market through 2021.

Out of the Chancellor’s control, but helping the market with other boosts, is the sensational march of Covid vaccinations and the pandemic-prompted and facilitated sea change in lifestyle choices.

With the public looking forward to the stepped retreat from lockdown and many people planning new ways of working between office and home, there are compelling new opportunities for buyers looking for first homes or for homes with more room in different surroundings.

As we wake up from the Covid nightmare it looks as if, aided by the Chancellor, a greater number of people will be turning some of their more pleasant lockdown dreams into realities.

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Exodus

Managing Director and Head of Residential Sales for Durrants, Dominic Parravani looks ahead to a busy spring in the property market.

In the wake of Covid 19 the UK experienced an exodus. This was the evacuation of urban dwellers to the land of milk and honey – the countryside.

The flight from city lockdown to a pastoral idyll was and is a compelling idea, especially when working practices have changed so much in the light of the pandemic.

But will this movement last? In a post-vaccination world there may be a gradual drifting back to the pleasures and convenience of big town or city life. But for many the change in lifestyle is now locked in. Roots have been put down in earth rather than concrete.

Despite the looming end to the stamp duty holiday deadline on March 31st there is little or no let up in demand. Lockdown 3 has brought even more buyers to the market and house price rises have reflected this.

Many exodus purchases have been a straight swap – town for country. But a good proportion of transactions have been for holiday homes with a view to longer-term permanent living through career change, altered lifestyle or retirement. This is clever thinking as any potential rises in capital gains tax could favour greater investment in principal residences, rather than second homes.

Covid19 has affected the property market in ways that we never expected, and we imagine it will continue to do so for quite a while. Unwelcome, horrifying and shattering as the disease is, for many buyers and sellers it has also unexpectedly proved to be a profound catalyst for change. If Covid19 fades in its potency into the spring and summer, we think those changes will continue to grow and become wonderful new opportunities. For many, the land of milk and honey beckons.

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Lessons learned

As the second wave of Covid19 affects lives, Durrants MD Dominic Parravani looks at what it augurs for the property market.

One thing that has proved to be resistant to Covid-19 is the property market, which has fed off the pandemic. If anything the spring lockdown acted as an incubation period for the market, as Coronavirus fuelled people’s desire to move to larger homes, often in more relaxed locations.

Now we are moving into hopefully a shorter second lockdown the question is, what will happen to this bull market?

The answer seems clear. Whilst we all know that these conditions can’t last forever, the early signs are that these second-wave precautionary measures will only act to fan the flames of the current market.

We understand now that during lockdown would-be buyers weren’t idle. Far from it; they were actively watchful. Once lockdown ended these buyers, armed with knowledge, stimulus and the freedom to act, broke out. The market became a feeding frenzy. Now, just as the national lockdown acted as an incubation period, the latest round of measures should do so again. But this time there will be added stimuli.

Completion by Christmas is often the aim when buying or selling property in the autumn. But now there is another target date: March 31st. This is the day the stamp duty relaxation measure is due to end. Buyers will be racing to complete purchases by then to avoid extra expense – money they could use for a deposit or for improvements to their new home.

Of course the Chancellor may postpone the cut-off date, or best of all discontinue the unpopular and opportunistic windfall tax altogether. But if he does neither strap yourself in – it’s going to be a hectic five months.

If there is one thing we learned how to do during the initial lockdown it was to work successfully in a highly unusual and demanding property market. Now we will take that experience and do so again, making sure that our buyers and sellers can move, not just when they want to but also when they need to.

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Loo rolls and other flying objects

As we head for autumn and further Covid restrictions, Dominic Parravani of Durrants assesses the state of the property market.

So many people are asking us about the property market at the moment. To provide some perspective, we often answer the question with a question. We ask, “Do you remember back in March, how loo rolls became difficult to find as they were flying off supermarket shelves?”

“It would be hard to forget,” most people reply.

So we say, “That’s what’s happened to property: houses are flying off our books.”

While the country was in lockdown, no one could envision what would happen to the property market next – including us. We couldn’t predict the strength of public demand for changes in surroundings and lifestyle. We couldn’t know how people would react to isolation, sudden changes in working practices and the resulting opportunity to commute less often but therefore further – providing the chance to buy a larger suburban or rural house and garden.

Now, after several months of the most extraordinary market most of us can remember, we have experienced the combined effects of the Covid and Brexit bounces, the relaxation of stamp duty and low-interest rates.

Many first and second-time buyers and sellers won’t remember the days when the market was on fire like this; when there were multiple offers on houses for sale, prices were spiralling upwards, and property was selling almost as soon as it came on to the market.

But we remember those days. We remember them very well. That is why we are highly experienced and skilled in dealing with this unexpectedly buoyant market.

For those thinking of buying before the end of the stamp duty reprieve, we recommend doing so now. Why? Because neither we nor anyone else, including the Chancellor, knows what’s going to happen next. Another national lockdown – if there were to be one – might only temporarily suppress this strong market and drive even more people to want to move. But big questions remain about the market in 2021.

High unemployment, a negative Brexit trade deal, tighter mortgage criteria and the end of the stamp duty relaxation, could turn off the tap that was so dramatically turned on in July.

Only time will tell. But in the meantime what we do know is that property is flying and we are here to help buyers and sellers fly with it.

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I Wish

Dominic Parravani of Durrants has some thoughts for property buyers and sellers who wish they could see into the future.

Don’t you wish that just once you could have a sure fire tip about the perfect time to buy and/or sell an investment?

If only you or your parents had known to invest in a small Californian computer start up company called Apple in 1976. An £800 investment then would be worth over £30 billion today.

Finding these tips and then acting on them is the stuff of legends. But it is still possible to do the right thing at the right time by listening to the right people.

For example, a good estate agent with great local knowledge knows exactly what is happening in the property market. So, if you are thinking of buying or selling your home, a good first move would be to get the best local advice.

And what would we, at Durrants, say if you asked us about the market right now? We would say that, following lockdown, we have not seen as buoyant or active a market as this since before the great recession in 2007/8. We would tell you that properly priced property is flying off the shelves. But we would also tell you that the property market is cyclical, and that sometime after this scramble to buy and sell is over, the market will eventually cool – it always does. It cannot stay like this forever.

Finally, we will tell you that now is as near perfect a time to buy and/or sell a property as you are likely to find, and that periods like this only come round every ten years or so. Plus, this time, there is Stamp Duty relief for many home buyers, and the lowest mortgage interest rates in history.

You’ll be pleased to know that we don’t charge for insightful property advice, and while we might not be able to turn £800 into £30 billion for you, we can help you make the most of what is probably your most financially valuable asset.

So, go on, make a legendary move…

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Booming Marvellous

As we head for late summer, Dominic Parravani of Durrants assesses the property market.

Covid-19 hasn’t been the only outbreak this year. There has also been an outbreak of property sales and letting since the end of national lockdown. The press has called this current property market a mini boom. We call it a maxi boom.

Mini booms occur when there is above average activity. Maxi booms happen when buyers are queueing up, there are multiple offers for most properties on the market, and deals regularly go to best and final offers only to exceed the original guide prices. This is what we are currently experiencing.

Nor has the lettings sector been left out of this market frenzy. There is enormous demand for rental properties.

Since the general lockdown ended our phones have been practically ringing off the hook and the numbers of visitors to our website and social media pages have skyrocketed.

Many things have changed since the pandemic hit our lives. One of these changes is in the attitude many of us have to how and where we live. A demand for more spacious and environmentally healthy living is driving the market, spurred on by a temporary reduction in stamp duty that has not only helped many second and third step buyers, but also has galvanised holiday home and buy-to-let purchasers.

Another change this summer is the government’s avowed intent to simplify and speed up the planning process. The current system has been described as “complex and slow” by the housing minister. It is a view hard to argue against.

But shouldn’t the minister also be looking at the current snail-pace of the conveyancing process? This is causing completion delays of up to six months in some parts of the country. How can buyers and sellers plan properly with this much uncertainty? It is a lamentable situation in this digital age, and one worthy of any government’s urgent attention.

As we head into late summer amidst all these changes our phones are still ringing and there is no let up in demand. We don’t know how long this surge in demand for property will last, but for buyers and sellers right now it is a boom market. So our advice is; to change your room use this boom.

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Make Hay While the Sun Shines

Durrants Managing Director Dominic Parravani assesses the Chancellor of the Exchequer’s stamp duty changes – designed to stimulate the property market.

With post-Covid demand for property at a welcome high level, one thing was needed to help create what could be the most active market since the great recession: greater affordability.

Now the Chancellor has gone a long way to help through his mini-budget. From 8th July 2020 until 31st March 2021 there will be a temporary stamp duty holiday on the first £500,000 of all property sales in England and Northern Ireland. This does not affect Scotland and Wales, which have their own property transaction tax regimes.

Under Sunak’s change buyers of second homes and buy-to-let properties will also benefit, but will still have to pay the existing 3% extra duty due on the entire price.

During this tax holiday, the average stamp duty bill will fall by £4,500, and almost nine out of ten people buying a main home this year will pay no stamp duty at all. Anyone buying a home for around £475,000 will save almost £14,000 in tax.

We in the property industry have long called for the government to overhaul a tax that has become a serious hindrance to buyers. Although seen as unfair by many, the government’s annual return from stamp duty is around £12bn – roughly equivalent to 2% of the Treasury’s total tax income. However even the Prime Minister has said in the past that he wanted to scrap stamp duty up to £500,000 and reduce the top rate – on homes costing more than £1.5 million – from 12% to 7%.

With the Halifax announcing, unsurprisingly, that house prices have fallen during the four months of lockdown, the new stamp duty level and the increased desire by many to make a lifestyle change mean this is the best time for years to buy a property. As any farmer will tell you, make hay while the sun shines.

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The New Normal

Covid-19 has changed the way many buyers search for a property. Dominic Parravani from Durrants explains.

Before Covid-19, most home hunters physically visited all the properties in which they were interested. They felt they had to as a way of drawing up a serious shortlist of contenders.

To a large extent Covid-19 has changed all that. Three months of national lockdown has profoundly affected the way buyers look for a property. During the lockdown, when buyers couldn’t and didn’t want to leave their homes, viewing online became the default method of visiting properties: this is where our excellent photography and virtual tours really came into their own.

Armed with a great virtual tour, Google street and satellite views, maps, floor plans and even – when appropriate – drone video photography, our buyers have never been so visually informed about property.

Now that buyers are freed from lockdown, will they revert to their old viewing ways? It is doubtful.

The large amount of time buyers have to spend in looking around properties – which frequently they won’t in the end buy – is now mostly a thing of the past. For them the saving in time, money and emotional energy is colossal. Our sellers also benefit because only highly interested and well-informed buyers will visit their homes. After all, that final physical viewing is the all-important one: it is the visit when the buyer’s heart confirms what their eyes suspected from online visits. The physical viewing will almost certainly not be the first – or even the second, third or fourth time the property has been seen. A buyer might have been inspecting a chosen property online for several weeks.

In the post Covid-19 property world, all estate agents are online agents. It’s just that some, like us, have offices in high profile street locations, providing our clients with the very best of both worlds. Not that one has to visit our offices to speak to us – Zoom meetings are another change that Covid-19 has brought to the property market.

We have all come out of lockdown modernised in one way or another. In addition all of us at Durrants have emerged as energised and as passionate as ever to provide the best service, advice, marketing and results for our clients. Call us now at any of our branches in Beccles, Diss, Halesworth, Harleston, Southwold or our Mayfair Office in London We very much look forward to hearing from you.

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Really Useful Engines

As the UK lifts out of lockdown, Dominic Parravani of Durrants suggests a chat over coffee to consider your next move.

The creator of Thomas the Tank Engine, the Reverend W Awdry, once said that the church was like a railway: both were trying to get people from one place to another.

Estate agents fall into the same category. We move people from one home to the next. And never has moving people seemed more important than now: because never have homes seemed more important to all of us as we battle to defeat the most deadly threat in our lives – and to our way of life – since World War II.

But something big is going on with homes. Our activity has gone through the roof in the past few weeks. The property portals are reporting the highest traffic to their sites – ever. In lockdown decisions to change – to move on – have been made and are now being acted upon.

It is at a time like this that estate agents become very useful indeed. It is their local expertise and market knowledge, which are so invaluable to sellers and buyers. Who’d have thought that houses and flats on dedicated cycle lanes would step up in value in only a few months? The answer is, an experienced estate agent.

So if you plan to move home, why not call us for a chat. Better still, arrange a Zoom meeting, Face Time or WhatsApp chat over a cup of coffee. You will find that we live in your area, we share and enjoy the same local facilities and we support the same local enterprises. More than that, you will find that we care in a way that goes beyond selling your property. We take care in moving our clients from one place to another.

Estate agents are engines of change. As James and Percy said to Thomas the Tank Engine, “We’re really useful engines, after all”.

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Bouncy Bouncy

Dominic Parravani from Durrants reports on a property phenomenon playing out now in a market near you.

The lockdown bounce has already begun. We don’t know how long it will be for, but it is undoubtedly with us now.

Within a day of the government announcement that the home buying and renting process could re-start, the telephone calls and emails began – and we have not stopped since.

People who, for whatever reason, have decided in lockdown to make significant life changes have now joined those who were already on that path in January and February. In the new year we had a Brexit bounce. Now it seems we have a double bounce.

We have already spoken to dozens of buyers keen to escape urban environments or in need of a lovely garden. Then there are those whose workplace will change from office to home and they’re looking for properties with room for a dedicated workspace. We have heard too from people who have re-evaluated their relationship with their home and now want something different from it.

Our commitment to those who have suffered during this period with ill-health or other issues is total. Our years of experience and in-depth local knowledge are already aiding those who need the support and commitment of sympathetic but practical property professionals. Those who are in difficulty with property matters are not alone in this. We are here to help. We know how to help.

We are taking all the precautions recommended to keep clients, viewers and our colleagues safe through the tail of this pandemic. If you need to make a move safely and wisely please contact your nearest Durrants office.

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Realism is our Vaccine

Now lockdown is being eased, Dominic Parravani of Durrants answers the sixty-four thousand dollar question about the property market.

As we gradually emerge from lockdown the first question clients are asking us is how will the coronavirus influence property prices?

This is something that is hard to answer with any absolute accuracy at this early stage. However the question is a crucial one.

Much will depend on the shape of the bounce back. If it is V-shaped we can be hopeful for only minor turbulence. However if there is a long tail then recovery prices in specific sectors could be affected.

While the lockdown has thwarted many plans to move, some people have found that post-virus working life promises the chance of more freedom.

Many people in future will work from home – the need to commute finally will be over – so a move to a rural or coastal location or to be closer to their families will be possible and even preferable. Many of these buyers will also be looking for properties with work-from-home space; others will want multi-generation family options.

So we see a great deal of cancelling-out between sectors; which brings us back to price. In this nothing has changed. The first thing an estate agent learns is that whatever the price quoted on a property, it will in the end find its correct level. A property is worth what someone will pay for it. An invisible hand called the market is not affecting property prices; people are affecting them.

We have sold properties on Christmas Eve. We have sold properties at the very depths of the great recession and in all parts of several boom-and-bust cycles. And even now through the Covid-19 pandemic we have seen sales through to completion.

No matter what the trend is across the country, throughout this pandemic our area has proved to be resilient and popular. Coronavirus has not altered that.

So what about prices? In the property sector realism will move us out of this crisis. With a realistic price, a pragmatic attitude to negotiation and a sensible buyer coronavirus will be unable to infect our market. Realism is our vaccine.

For realistic advice about marketing your property call us today on 01502 723292. We are open for business.

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Getting in gear

Seven weeks into lockdown, Dominic Parravani from Durrants looks at how coronavirus has affected life in the property market.

Throughout the lockdown, our team have been working remotely. At first we thought there would be little to do. How wrong we were.

The past four weeks have been frantic. First there were all the property sales we had to get past the finishing post. Even in lockdown we have been able to do this within strict government guidelines. Then there are the deals that we had only just tied up when the lockdown began. It is astonishing how many buyers and sellers have been keen to keep to their plans – even though they will have to add months to transaction times.

But now we are also busy working with those who are already planning new lives beyond the pandemic. We are advising on marketing and even ballpark pricing – subject to final inspection. We also have many keen buyers who have pencilled in viewing appointments for when the lockdown is over.

Of course, it isn’t fun. None of this is: for anyone. The virus has changed our lives and the lives of everyone with whom we work. But despite working remotely our team is working together. We are working with our clients, our buyers, our central London marketing team and our 300 associated offices around the UK.

Working together is what sets us apart.

Working through the pandemic is like riding a bike up a very steep hill. We have had to change gear. We will probably change gear again before this crisis is over. But one thing is very certain; we will be in the right gear when it’s all over.

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Adding £££s

Dominic Parravani from Durrants takes a look at what home sellers can do during the lockdown period to attract the highest sale price for their property once restrictions are lifted.

So, you have spruced up the front of your property – having the exterior looking at its best is vital, as it persuades people to look at the interior. But now you don’t want to let viewers down when they choose to look inside.

Most sellers have busy lives and invariably don’t have much time to prepare their homes for the market. In this unique period of lockdown we have been given the perfect opportunity to put this right.

Pre-market prep is so important. It can make thousands of pounds’ worth of difference to the sale price, and can sometimes even be the deciding factor between attracting a buyer or not. So now is the time to get things ship-shape.

This doesn’t always have to mean painting and decorating, but it does mean attention to some important details. Here are some things to remember when prepping a property in readiness for viewers:

Make sure the hall is inviting and clear of clutter – hats, coats, shoes, children’s school bags, etc. That first impression is important. You need your viewer to want to see more of your home – not the back of your home.

Kitchens and bathrooms sell houses. Make sure yours are sparking clean and clear of clutter – in fact getting rid of clutter is a recurring theme in preparing your home for sale.

Is the living room inviting? Will one want to eat at the dining room table? Can one actually see the dining room table?

Have the beds been made? Are the cupboards neat? Overflowing cupboards send the message that a property is short on storage space.

Remember that luxury hotel room that made you feel like a million dollars? Your property should make viewers feel like that. It is not that difficult. But it does take discipline, and it does take time – time that you might well now have.

The TV home “experts” say that you should take the personality out of your home and make it bland to sell it well. You really don’t need to go that far – a good estate agent will help the property sell well. But it is up to you to maximise the value of your asset.

Making your house or apartment fit for the market is an art. Start with the basics – clear, dust and shine. Then take a good look at the stuff you have left and de-clutter as though your sale depends on it – because it does.

If you need advice, then Durrants are masters in the art of pre-sale preparation. Do call us on 01502 723292 or email us at Dominic.parravani@durrants.com and we will be happy to run though some dos and do nots so that you are ready for the market once the pandemic has safely passed.

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The Value of Home

Dominic Parravani from Durrants looks ahead to a time when we can all move freely from our homes.

In houses and apartments all over the country those in lockdown are thinking about life after release. Even now, at the height of the pandemic, people are dreaming of post-virus life. We know they are because they are telling us so.

If this period of isolation from our families, friends and familiar routines has taught us anything, it has taught us about the value of home. No matter how small – and for those in tiny flats without outside space the lockdown has been much harder than for most – our homes have kept us safe.

But that is what homes do and have always done, it is what they are designed to do. They keep unwanted intruders out. Over the past few decades this side of home ownership seems to have taken a back seat to investment and capital growth. That thinking will change. Security, affordability in crisis, comfort in lockdown and space appropriate to need will jump into the driver’s seat – with location, location, location in the passenger seat.

This time in lockdown has given many of us the opportunity to re-evaluate where and how we live. Our shopping habits will have changed further, and so will our methods of communicating and streaming entertainment. In future lots more of us will work from home, having realised that many can be just as effective without a daily commute. Some will want more substantial homes, and some will have decided to downsize or rightsize. Many will elect a lifestyle change, choosing to move to the country, to the coast or to a bustling and lively city centre close to all amenities.

Our needs for what a home gives us will change, but it will not alter the local property market. Coronavirus is a health issue: it is not a property issue. This virus has reminded us what a wonderful, helpful and joyous community we inhabit and the true value of living here.

When we are over this emergency, Durrants will be here to understand your property needs and offer suitable and attractive solutions, because if there is one thing we do know a great deal about, it is the value of home.

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Screen Appeal

Dominic Parravani of Durrants explains a vital step a seller can make now to help achieve a successful property sale once the coronavirus danger has passed.

The daffodils have bloomed and the bluebells are about to, and it should be a perfect time to sell your property. Except it isn’t. Instead our thoughts are of saving lives through sheltering at home.

It might seem counterintuitive, but this might be the ideal time to at least start planning your next move – and particularly the sale of your home. As the country deals with Covid-19, there are positive moves you can make to prepare your property for the market – when the threat is well and truly over.

So why not use these weeks ahead to take a step back and try to see your property through a future buyer’s eyes.

Estate agents have always talked about kerb appeal – how well a property looks to a passer-by. This impression is still important. But more so at the moment, is screen appeal. Most potential buyers will see your property via a mobile or desktop device, not by walking or driving past.

This provides sellers with a great marketing opportunity. On screen you have the chance to present your property at its very best, all the time – regardless of weather and other detrimental factors. With the benefit of extra time, photographs of your property can be taken on a lovely bright day with the sun in just the right direction – and with the windows sparkling clean. Your garden can look its best with no cars in the drive or bins in the way. In other words, you have control of what people see on screen in a way that you can’t always when someone is randomly driving past at any time of day or night.

So, why not make full use of this opportunity? Remember, if a buyer doesn’t think you are proud of your property they probably won’t be interested in buying it. Your property deserves to look its best. You need to make a great impression.

At Durrants, we can advise you how to make your property look the best it can on screen for when that critical buyer comes calling online. We understand how vital it is to create an excellent first impression – after all, you will never have a second chance.

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COVID-19 Update

In accordance with emerging Government guidance, Durrants has implemented a homeworking policy. The business has developed a contingency plan for this eventuality and is able to operate in this way for the duration of the Covid-19 crisis. We will adopt proportionate measures to ensure that our services continue to be delivered, with minimal interruption where possible, whilst operating within the parameters set by prevailing Government advice. We are encouraging the use of video conference calls and are able to host these for you. If you would like more information about these, please do not hesitate to get in touch with your usual contact within Durrants or the head of the relevant department. Durrants has been trading since 1853 and we have been through world wars, recessions and everything else the last 160 years has thrown at us. We came through then and we will come through now, even stronger than before. We wish everyone the very best during these unusual times and please do not hesitate to contact us if we can help in any way. Keep safe.

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Durrants Statement

A statement from Durrants Managing Director, Dominic Parravani, on the effects of Coronavirus.

As the spread of Covid-19 continues, we wanted to reassure our clients, customers and fellow professionals that we are constantly reviewing the effects of Coronavirus. The well-being of our clients and employees is our primary focus. We are adhering strictly to government guidelines, whilst remaining fully committed to providing an ongoing service to our clients across all sectors of our business.

To limit the risks to all, we are trying to avoid face-to-face meetings and will communicate primarily via email or telephone. We have excellent IT systems in place; many of our staff are already working from home. We endeavour to keep our residential and letting offices open and fully operational as long as government advice allows. We will continue to deliver high levels of service across all our departments.

During these challenging times, our staff will keep in contact with clients and we will notify you of any changes to our working practices and services.

All relevant contact details for our offices and staff members can be found on our website: durrants.com

Should you require a meeting with any of our staff, please do not hesitate to contact us and we can still make arrangements for you to meet in our offices or on site. Alternatively our staff members also have access to a remote conferencing service which allows us to conduct meetings with you online, where necessary.

We have weathered many storms since 1853 and I can assure you that Durrants are well prepared to meet the challenges ahead. We look forward to returning to normal working conditions in the near future.

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How can the Budget can move the housing market?

Dominic Parravani looks ahead to the March Budget. The year has started well in the property market, but what could the Chancellor do to really get things moving?

On the 11th of March, Budget Day, all eyes will be on our new Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP.

One group of English taxpayers will be especially interested in what, if any, changes there are to Stamp Duty. This tax is payable by those buying property over £125,000 – although first-time buyers aren’t liable for stamp duty on homes up to £300,000. The taxation for Scottish and Welsh homebuyers is slightly different.

With the average house price in the UK now £234,742, this stamp duty affects a great many homebuyers. So much so, that over the 2018/19 tax period, the government collected almost £12 billion in stamp duty revenue. A cynic might think, small wonder the government is actively persuading the population to buy homes.

But the problem with high stamp duty is that it does the opposite. It deters people from moving – prevents people in larger homes, they don’t need, from downsizing and selling to people who do need them. It stalls the market and prevents a natural flow of discretionary buying and selling.

A previous Tory plan was to overhaul stamp duty by raising the threshold from £125,000 to £500,000 and lower the top rate – which applies above £1.5m – from 12% to 7%. But this was dropped from the last election manifesto. Could the Chancellor resuscitate this policy? It would greatly help the housing market if he did.

Although the introduction of a mansion tax is looking unlikely, overseas buyers will worry that the Chancellor will introduce a 3% stamp duty surcharge. This tax would include ex-pats wanting to move back home – after Brexit, more likely than for many years. This levy would be on top of stamp duty already payable, including the 3% surcharge on second homes and buy-to-let properties.

Successive chancellors might not have been precisely helpful to the housing market. Now that this government seems keen to build infrastructure, perhaps they will be inclined to treat housing – and flood defences – with the same importance the population does. Railway lines may be necessary but aren’t good homes and a buoyant property market more so?

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20-20 vision into the property market

Mark Mugliston, Residential Sales Manager at our Diss office, shares some good news on the wider property market and industry.

The dominant feature of the market in the last 12 months has been caution. Many potential sellers decided to stay put amid political and economic uncertainty, amid the Brexit debate and general election. Whilst the goings-on in Westminster last year put off sellers, demand among potential buyers remained relatively stable.

Low interest rates meant mortgages were relatively cheap for anyone finding a home within their budget. First-time buyer numbers were also surprisingly healthy. Debt, divorce, schools and new jobs still prompted people to move.

That led to prices rising on average across the country, if only by a little, rather than wholesale property price drops. The Nationwide Building Society says, on average, UK house prices went up by 1.4% over the year. The falls were mostly seen in and around London – the market most affected by Brexit uncertainty and from where a large number of our buyers come from.

What will happen in 2020?

The result of the general election has brought a level of political certainty and a clear route, in the short-term at least, for the Brexit process. Many experts suggest this could play out in the housing market with a release of some pent-up demand among buyers and sellers. People who put off making one of the biggest financial decisions of their lives may now feel more confident in making that step.

While that may inject some activity in the housing market in the first few months of the year, most commentators do not expect it to last. Before long, they say, the uncertainty and debate over the UK’s future relationship with the EU could mean more caution in the sector.

As a result, they are mostly predicting that house prices will rise by 2% from the start to the end of 2020. Only one market commentator, Henry Pryor, seemed to be forecasting a fall in prices this year in a BBC article about the state of the market. Everyone else, from mortgage lenders to those working for the main property portals, is expecting a modest increase.

These predictions are for a UK average, but the housing market must always be considered on a local level. House prices can be affected by anything from schools to new developments and transport links, sometimes recording different rates of change from street to street.

Richard Donnell, director of research and insight at Zoopla, suggests that the more ‘affordable’ cities for property, such as Glasgow, Belfast and Liverpool, could witness the biggest rises in prices in 2020, up by about 4%. The least affordable – London – could see prices rise by about 2%, he says.

Affordability, as in any year, is crucial to demand, particularly from first-time buyers. The eyes of the property world are firmly on the new government and its housing policies.

These policies need to focus on those first-time buyers, many of whom are struggling to save a deposit and may not want to buy a new-build home through the government’s Help to Buy assistance scheme. It will also be interesting to see whether we really do get a programme to actually build truly affordable homes.

The biggest challenge could simply be that housing is not at the top of the government’s priorities.

There may be more darkness than light in EU negotiations and some pinball politics to contend with again in 2020. That means buyers and sellers could play it safe and house prices could well hold steady again.

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Snowdrops

Dominic Parravani responds to the dramatic start to the new property year and looks at the green shoots of improvement.

Like early snowdrops, property buyers have begun poking their heads above ground after a long period of slumber. In fact, in some parts of the UK, there are significant and spectacular drifts of these ‘snowdrops’ appearing. Is this because of the time of year? Partly: but more likely because we are emerging from an extended and dark period of lifelessness in the property market.

Call it the Boris or Brexit Bounce if you like, but whatever term you give it there is a definite surge in the market with markedly more interest and activity. All over the country numbers of registrations, viewings, offers and sales are up on the previous two or three years – and it’s only February.

Confidence should be the name given to the first physical brick laid in any house construction or metaphorical brick laid in the re-building of the property market. It is confidence that is driving this newfound interest, and it comes at a perfect time of the year.

There was concern that a December election would be harmful in multiple ways. Well, in the case of the property market, it was perfect. With the will-we/won’t-we Brexit issue settled a large cloud of uncertainty was lifted and those who were sitting on their hands have, post-New Year, suddenly jumped into action.

Behind this energy is several years of pent up demand. Those who could wait to make a move or who were nervous did wait. But now the waiting is over. In all sectors of the market and across all regions demand is higher than it has been for years.

This is all exciting stuff, but we should not get too carried away. In property confidence can soon give way to over-confidence, with sellers often eager to set higher asking prices. We don’t want to see all those snowdrops droop under an ill-considered layer of expectation.

So prudence and guidance are critical factors in sustaining this excellent start to 2020. As always, before embarking on selling and or buying a property, we advise seeking the wisdom and counsel of a mature and experienced local independent estate agent before you join the fray. We’d love to help and advise you – do please call us now on 01502 723292.

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Dare to dream

Dominic Parravani takes a fresh look at the property market as we enter the New Year.

If you read or listen to the property press, or the national media commenting on the property market, you will know they are currently awash with speculation and projections on the way the market will behave in 2020. But it is only speculation. We have never been in conditions quite like this – coming off the back of a surprisingly emphatic election and three-plus years of market dormancy, brought on by political confusion and inertia.

However the national press are not necessarily the safest forecasters of the overall picture. Many seem to forget that the property market is not one homogenous whole across the country but is a series of mini-markets affected by local and regional economic micro climates.

As we enter a new decade, these micro conditions will once again enter into play. Regions about to see economic stimulus will come into a new focus. Areas benefiting from new infrastructures such as transport will become targets for renewed interest from buyers. Parts of the country that have been in decline will begin to bloom and perhaps even boom in property terms. Sellers will reap the reward.

Of course, buyers will still choose locations for schooling, work, retirement and natural beauty so these factors will continue to be strong personal influencers. But one thing most of us in the business can agree on is that the cloak of uncertainty which created the prolonged slough of activity in the property market has lifted.

It is although a curtain has been drawn back to reveal new dreams and a buying and selling public now prepared to act. The increased number of new buyers and sellers already contacting us this year emphasises this.

But the change in public perception will not come overnight. It will happen by degree. But it will occur as new opportunities arise. Hot spots will evolve. The secret for buyers is understanding and even anticipating where these hot spots might be.

As estate agents, experts in property and our communities, we are the people best suited to comment on the market in our area. We have been doing this for a long time. Whatever your property dreams please come and talk to us first. We are dream catchers.

As the second wave of Covid19 affects lives, Durrants MD Dominic Parravani looks at what it augurs for the property market.

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