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Housing boom sends asking prices to record highs

Post lockdown the UK housing market is in a mini-boom with asking prices at record highs and rising £7,640 this month.

The UK housing market is experiencing a mini-boom according to Rightmove with asking prices at a record high of £320,265 and since March have increased 2.4% or £7,640.

For home movers wanting to trade up when prices are rising, they may find their next property is more expensive as asking prices have increased 2.7% or £7,708 since March and an average £288,526.

The 2.0% rise in asking prices since lockdown to an average of £199,340 means first time buyers would require a higher deposit or larger mortgage to buy their home.

Property enquiries higher by 75%

Since the housing market was reopened post lockdown the number of buyer enquiries are higher by 75% compared to the same period last year.

Demand is expected to continue and increase further as Scotland fully returns to the market and Wales has yet to reopen further helping the mini boom in asking prices.

This table from Rightmove shows how average UK asking prices (excluding inner London) have changed from March to July 2020 for different types of buyers.
Sector March July
Change
First time buyers £195,463 £199,340 +2.0%
Second steppers £280,818 £288,526 +2.7%
Top of the ladder £549,081 £571,005 +4.0%
Asking prices have increased over the month with the top of the ladder properties higher by 4.0% or £21,924 to an average of £571,005.

These higher asking prices can enable the equity release buyer to access money with a lifetime mortgage and use this to repay an interest only mortgage, loft conversion or conservatory extension.

Even remortgage buyers could switch to a record lower interest rate mortgage deal to release capital which they can use to improve their home without a significant rise in repayments.

Surge in buyers with stamp duty holiday

The stamp duty holiday has seen a 35% surge in sales agreed just five days after the announcement compared to the same days last year.

The holiday is offered until March 2021 and for a property worth £500,000 would result in a saving of £15,000 in stamp duty which could increase your deposit or go towards furnishings and decorating costs.

First time buyers will not benefit from the stamp duty holiday as they are exempt for properties valued up to £300,000.

Other buyers such as second homes or buy-to-let investors can benefit although you would still be liable for the 3% stamp duty surcharge currently applied.

According to Rightmove in the first month since reopening 44% or 40,741 out of the 92,085 newly listed properties have buyers compared to only a third for the same period last year.

There is a limit to how far property prices can rise as lenders are withdrawing high loan to value mortgages making it difficult for first time buyers to find a deposit.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage monthly cost calculators, property value tracker chart and equity release calculator.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to purchase a new car or pay university fees for grandchildren.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.

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