Mark Johnson of Griggs Homes has expressed ‘optimism’ following the surge in mortgage approvals and the increased demand for properties in the UK. In turn, this has led to ‘strong interest’ for new build homes and developments across the nation.
The stamp duty is not only advantageous to new buyers, but also the thousands of employees who work in construction, development, mortgage broking and real estate who benefit from more business and enquiries.
It was reported that this August has seen the largest growth in mortgage approvals since October 2007 - and this has fueled the highest growth in UK property values since February 2004, estimated to be around £225,000.
Around 84,700 mortgages were approved in August 2020, taking the overall number to 415,000 approvals this year. Despite the surge, the overall number of approvals is down, largely due to the limited activity during the lockdown periods of March to June 2020.
Rightmove revealed last month that there has been a 30% to 40% increase in demand for property in the UK, specifically for 4 and 5 bedroom homes that are situated outside of London - plus, a demand for larger gardens.
This change in taste has been largely attributed to the evolving nature of work, with more and more people working remotely due to covid restrictions or needing larger spaces to accommodate their families.
Above all, the government change in stamp duty rates which charges 0% on all properties under £500,000 has ignited huge demand for new properties, especially for first-time buyers. This initiative was launched on 8 July 2020 and will run until 31 March 2021.
Previously, someone buying a property for £400,000 would pay 3% in stamp duty, equal to £12,000. However, this rate is now 0% until March, creating quite the saving for new homeowners or those looking to move house.
“There have been a number of challenges since covid started. Mortgage lenders were originally slower to get off the mark, creating slow completion rates and timber suddenly became very hard to get hold of and very expensive. But recently things have been picking up and above all, a lot of people are very incentivised by the stamp duty cuts.”
