According to Reallymoving, the end of the stamp duty holiday will lead to a fall in residential property prices in England and Wales by an average of 4.1% by April
The UK property industry expects house prices to fall in the next three months, as lockdown and the end of stamp duty holiday slow down the market.
The end of the stamp duty holiday will lead to a fall in residential property prices in England and Wales by an average of 4.1% by April, according to Reallymoving.
The average price of a home will fall from what it says was £338,951 in January, to £308,773 by April, as property sales start to fall through, the firm estimates.
According to Reallymoving, its three-month forecast is created by analysing conveyancing quotes given through the firm’s comparison tool, which is typically done 12 weeks before completion.
According to the data provided by the company, prices are rapidly shifting to levels seen 12 months ago, as the stamp duty is set to end and the post-lockdown rush to move home fades.
According to Reallymoving, the new year downward trend in prices is accelerating as we head towards spring, with prices set to fall by 2.5% in February, 2.6% in March and 4.1% in April 2021.
The firm say the impact of the stamp duty holiday can be seen in the value of deals being agreed between buyers and sellers in January.
It believes those that agreed deals and may not complete before the stamp duty holiday deadline are likely to renegotiate, or split the cost across the chain, further impacting prices.
It also expects to see some first-time buyer activity later in the spring and early summer backed by low-cost high LTV mortgage products, lower property prices and the launch of the new HTB scheme.
Rob Houghton, CEO of Reallymoving, said: Now, for the first time, we can see the early impact of the end of the stamp duty holiday on prices, with buyers in January agreeing to pay less as they factor in the cost of a tax bill.
Others who agreed deals earlier will still be hoping to make the deadline, and it’s likely we’ll see a sharp rise in fall- throughs in early April, as well as gazundering, which could impact final sale prices further if sellers are agreeable to spreading the cost – and many will be, rather than see their deal fall flat, Houghton said.
He said that transparency and openness are key, and rather than hoping for the best, practical buyers and sellers will be opening up conversations now to try and ensure they can still proceed if they fail to complete by 31st March.
