Market activity is being reported as strong across all boards. The latest Zoopla price index report suggests that prices are on average over 3% higher year-on-year. Wales is experiencing some of the highest growth of all the regions.
This is mostly because of the COVID-19 pandemic causing re-evaluation of the work/home life-balance with many industries realising that home working is a viable long-term option; Coupled with the beauty of our county and spectacular coastline, comparatively low house pricing and the relatively low number of Covid cases has seen many, many enquiries for property from outside the county, much more than usual.
The fever of the market has been bolstered by the Land Transaction Tax (LTT), formerly known as Stamp Duty, break until March 2021. In wales, there is full relief on LTT up to £250,000 for properties completing before March 2021.
The market, whilst strong in activity, has its battles –
Lending is difficult – High Loan-to-value (LTV) products are reducing meaning that there is less choice at the target interest rate or simply too high a deposit is demanded from some lenders for a large number of borrowers.
Asking prices are all over the place – with many Agents seeking to capitalise on eagerness of home seekers we are seeing inflated asking prices that are being reduced a few weeks later on once the vendor is committed to a lengthy marketing period (this has its own problems – for a future post).
Failed sales are also a high statistic at present – partly because of inflated prices not being matched by mortgage valuations, partly because of general uncertainty with lockdowns and media reporting and partly because of lenders moving goalposts after the sale has been agreed.
Despite all those challenges the market continues, and boy does it. However, we now face another challenge – whilst the Covid crisis could be the main protagonist of the feverish market we have seen over the last few months it is also the cause of much delay in the actual conveyance progress. A backlog of mortgage applications is being forced through a tightening bottleneck, conveyancers are seeing huge increases in new instructions and the local authority is struggling to process searches. All this has led to an average transaction period of 100 days.
This means that if you want to take advantage of the LTT break you should have a sale/purchase agreed by mid-December to ensure completion by the end of the LTT break.
There are other things that can be done to ease the process and the most important is to establish relationships with a good agent that can advise you appropriately, guiding you through the uncertain terrain that is the housing market. R K Lucas & Son are well equipped in this respect and are happy to discuss further with you as to how we can help you navigate these uncertain times and get you past the finishing post in the best possible time.