Despite the pandemic, the UK property market stayed surprisingly strong throughout 2020. Low-interest rates paired with the Stamp Duty holiday led to high demand and a rise in property prices. Telford has been no different, and one year on from the first national lockdown, there are no signs of slowing down for our local property market.
In December 2020, the average house price in the UK hit a record high of £269,000, increasing by 8.5% on the previous year. Since last summer, the property market has been a hive of activity, with pent up demand putting buyers in fierce competition to secure a property. Paired with the Stamp Duty holiday, buyers have raised house prices by putting the money they save into paying more for their properties.
Meanwhile, the average property price in Telford is £194,521 increasing by 4% over the last year. This rise in value follows national trends, but not to the same extent. So while this increase is great for our sellers, it also means that Telford has an attractive market, providing buyers with more value for their money.
Based on the factors that have led us to such a flourishing property market, it’s safe to say that we can expect this to continue well into 2021.
The Stamp Duty holiday first began in July 2020, removing the tax due on properties up to £500,000. This bid to boost the property market gave buyers the chance to save thousands of pounds, significantly reducing costs and giving people the power to move.
The government has now extended the Stamp Duty holiday, and the current £500,000 threshold will apply until 30 June. This will then be reduced to £250,000 between 1 July and 30 September.
Since the extension was announced, we have seen another surge of buyers looking to move within the Telford area. While many thought they had missed the boat, the holiday extension has given people the motivation to move quickly and make the most of the opportunity. If buyers act now, then based on Telford property prices, they could save up to £2,500.
The Stamp Duty holiday will now end on 1 October, but the purchase will need to be completed before then. This means that while spring and summer 2021 should continue the upward trend we saw last year, things will likely slow down again come September.
At the end of 2020, new mortgage approvals in the UK were also 24.2% higher than the previous year. This is the highest rate of approvals since 2007, and is set to continue well into next year thanks to the new 95% mortgage scheme.
The new scheme will run from April 2021 to December 2022, giving more buyers the power to purchase properties with just a 5% deposit. Although 95% mortgage loans were once common, they proved too risky for lenders during the pandemic. However, by offering compensation if buyers default on their payments, the government hopes this will encourage lenders to start offering 95% loans once more.
Designed to turn ‘generation rent into generation buy’, this scheme will make it easier for buyers to save up their deposits and take their first step onto the property ladder. Paired with below-average house prices and the Stamp Duty holiday, Telford has the ideal property market for first-time buyers and anyone with low equity in their property.
The last two property market crashes were in 1988 and 2008, when many people were forced to sell their homes due to bankruptcy and job losses. This meant that the number of properties for sale far exceeded demand, pushing down house prices.
While Covid did have a massive impact on businesses, the government ran a number of support schemes to help keep the economy as stable as possible. From furlough and mortgage holidays to Bounce Back Loans, these support schemes have helped many people keep their jobs, and therefore their homes. At the moment, demand actually exceeds supply.
There’s also a big difference in interest rates. In 1988, the rates were 11.5%, dropping to 6% in 2008. Nowadays, interest rates vary between 2% and 3% on a five year fixed rate mortgage. This puts our Telford homeowners in a much stronger position.
Thanks to low interest rates, low deposits and no Stamp Duty tax, the increased demand is expected to continue growing well into 2021. As government schemes come and go and the economy adapts to post-lockdown life, the property market will no doubt experience some ups and downs. However, all in all, everything looks positive.
As we cautiously take our first steps out of the third lockdown, there’s still plenty of pent up demand from buyers. Lockdowns and restrictions have motivated the market, and with working from home now the norm, more buyers and renters will be looking to find a property that suits their new lifestyle. Buyers will be on the lookout for those properties that offer flexible work and living spaces.
This past year has also highlighted the importance of being able to access the outdoors. Buyers will now be looking for properties that come with an outdoor space, or which provide easy access to local parks and walking routes.
We have also noticed a general trend of people moving from urban to rural. With Telford delivering the best of both worlds, it’s safe to say that this has become a highly desirable location.
The property market can be difficult to navigate at the best of times. Whether you’re looking to move or join the property ladder, our team of experienced agents know everything there is to know about Telford’s property market. Get in touch today for expert advice, and we’ll help you take the first steps towards finding your perfect property.
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