Home hunters looking for a bargain may be disappointed, say property consultancy Knight Frank. The firm found that while discounts are still being negotiated, sellers are sticking close to their asking prices as demand grows more quickly than supply.
The number of new prospective buyers registering was 94 per cent higher than the five-year average in the week ending July 25. The equivalent increase in supply was just 54 per cent.
Tom Bill, Head of UK Residential Research at Knight Frank, says: “What’s happening is the release of pent-up demand that has been building for years against the backdrop of Brexit, tax changes and tighter lending rules. This is putting upwards pressure on prices. In fact, prices are firmer now than they were a year ago, based on the level of offers made and accepted.”
On average, offers were accepted at 98 per cent of the asking price in July, which is a percentage point higher than the same month last year. Tom adds; “This doesn’t have the over-exuberant feel of a price bubble. With a global pandemic still underway, buyers are not getting carried away. It does, however, feel like a slightly artificial moment in time. Covid-19 has been a great accelerator for existing forces and patterns of behaviour across all areas of the economy and the housing market is no different.”
He believes that the market will eventually self-correct: “What should simultaneously begin to emerge is what the new longer-term normal looks like. The property market will be no different from many other sectors of the economy in that respect. It will ultimately depend on issues outside of its control including vaccine development and the government furlough scheme. For now, prices are heading in one direction.”
House builders have also seen a surge in sales and for those using the government’s Help to Buy equity loan scheme to purchase a new-build home there is good news.
The deadline for the homes to have been finished in order to comply with the scheme has been extended from the end of December this year to February 28, 2021. The extension was granted to take into account construction delays due to the pandemic. The deadline for the legal completion of the sale will remain the same, March 31, 2021.
Those who have experienced severe delays as a result of coronavirus are also to be helped. Homes England will work with those who reserved a home before June 30 to assess their situation and provide an extension until May 31, 2021, to legally complete the deal. The Government’s new Help to Buy scheme, which will replace the current scheme, will start on April 1 next year and will run until March 2023. It offers the same low-interest loan of up to 20 per cent towards a deposit but it will be restricted to first-time buyers only with property price caps.
For those who own a home in need of energy-efficiency improvements, the Government has revealed more details about its £2bn Green Grants scheme due to launch in England at the end of September. Builders, plumbers, and other tradespeople who want to provide services for the scheme must register for TrustMark or Microgeneration Certification Scheme accreditation.
Homeowners can claim vouchers worth two-thirds of the cost of the energy efficient improvements, up to a maximum of £5,000 per household. Those on low incomes can claim the full cost of energy efficient improvements up to £10,000 per household.
However, to qualify you must install at least one “primary improvement”, including solid wall, cavity, loft, underfloor or roof insulation or low carbon heating, such as air source or ground source heat pumps or solar thermal systems.
If you already have these installed, you can use the vouchers to install “top ups”, such as more insulation to reach the recommended amount. If you install at least one primary improvement, you can then, and only then, use the vouchers for secondary measures, such as replacing single glazing with double or triple glazing; energy-efficient doors where you are replacing doors installed before 2002; draught-proofing; heating controls and insulation.
You can only have funding for these secondary improvements up to the amount the government has given you for primary measures. So, if you have received £1,000 towards cavity wall and roof insulation, you can only have a maximum of £1,000 towards any secondary measures, such as double glazing.
Later this month, homeowners across England will be able to access advice on improving the energy efficiency of their homes and on funding this from the Simple Energy Advice service. The SEA website is due to launch soon.
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