Why do asking prices keep rising?

 

Even through a Global pandemic, house prices in the UK have been steadily rising to a record high.

Nationwide building society said the average house price increased to £245,432 from £216,403 in June 2020.

 

Why asking prices are rising.

Factors that have increased the demand for properties.

The pandemic has caused people to re-assess what they want from their home.

  1. Large, detached homes with big outdoor spaces are in high demand from buyers with big budgets, with many now working remotely and commuting less.
  2. The pandemic has also made many people realise that the most important thing is for them to be close to family members and so a re-assessment of their geographical location has occurred.
  3. The return to very low interest rates has also helped more people to get on the property ladder, or to upsize to bigger and more expensive homes.
  4. First time buyers have been incentivised with a government-backed mortgage guarantee scheme offering buyers with small deposits access to 95% mortgage loans
  5. Stamp duty savings

 

Stamp duty factor

The market in recent months has continued to be stimulated by stamp duty holidays.

The temporary reduction of stamp duty tax rates in England and Northern Ireland has offered buyers a potential saving of up to £15,000, so many buyers are racing to move before the deadline.

Stamp duty tax savings and record low interest rates have helped many to afford higher prices, so they can find a new home that suits their changing needs.

Factors that have reduced the supply of properties.

  1. As the stamp duty tax break is now coming to an end, people, especially at the higher price end of the market, will be less inclined to put their properties on the market.
  2. With Furlough and other supports coming to an end, people are naturally thinking about their job security. People are less likely to put their property on the market under these circumstances.

 

The demand for homes is currently outstripping the number of properties available to buy. For this reason, homes are being sold at or above asking price.

However, we are uncertain whether this boom will be followed by a bust. If the economy fails and people are forced to sell and there maybe fewer people who are prepared to buy under these circumstances. If that situation is sustained prices may begin to fall again.

 

Rob Cranwell

Author

 

How to make your home more valuable and sell faster

Preparing your home for viewers, or “staging” as it’s called, is important. It will not only ensure
your property is sold faster but can potentially add thousands of pounds to its value.

Top Tips

Declutter – but don’t depersonalize

• Get rid of all the excess stuff that has accumulated in every nook and cranny. Put it in storage or give it to a friend

• People need to be able to envisage what the property would look like if they were living there. People often find this difficult, so make it easy for them to see all the fantastic living space you’re offering them

• Don’t make it look like a generic hotel; leave some personality. Apart from anything else it gives unimaginative buyers
suggestions as to what they might do

• People are often buying into a lifestyle as much as a property. Show them the attractive side of your lifestyle

• Consider removing any bulky furniture that makes the room feel small and replacing it with smaller furniture

A fresh lick of paint

• Giving your walls a fresh lick of paint, neutral paint will make your home seem lighter and bigger

• It will enable the viewers to more easily imagine how they would adapt the rooms to their needs

• It will be easier for the buyers to move in and use the rooms immediately than if the walls were still bright purple or
lime green

• Create a good first impression – give the front door a new coat of brightly coloured paint

Fix and clean

• Make any minor repairs necessary – holes in walls, broken door knobs, cracked tiles, torn or threadbare carpets.
Many buyers want to move in without making changes, so allow for this

• Clean everything until it sparkles. Get rid of limescale, clean and repair tile grout, wax wooden floors, get rid of all
odours, hang up fresh towels. This will make the place more appealing and allow viewers to imagine living there

• Tidy up the garden: cut bushes back, clean the patio and furniture of lichen and dirt, and cut the grass. While this
doesn’t add much value to your home it makes it more likely to sell as people visualize themselves using the garden

Update the kitchen
The kitchen is the most valuable room in a house. It is worth the most per square foot and can make the
difference when buyers are unsure

• Consider refacing your kitchen cabinetry. This is much cheaper than installing new cabinetry and often as effective

• Upgrading kitchen counter tops is expensive, but can add serious value

• Declutter the surfaces and just leave a bowl of fruit out. Take out any bulky appliances

• Consider upgrading the plumbing fixtures and white goods, but keep in mind that while that could make your

property sell faster, you will be unlikely to recoup their full value

Light and airy
• Wall mirrors make a room look much bigger and lighter. Consider putting some up, especially in smaller rooms
or hallways
• Clean windows inside and out and replace any broken light bulbs. Making the place feel light and airy makes rooms
feel bigger and the property more attractive
• Ensure that you have lamps on in any dark corners
• Putting a soft light bulb in the bathroom can create a warm glow

Light a fire
• If it’s a cold evening, or even chilly day, light your fire. Consider burning some pinecones for the delicious smell. This
will make your home feel warm and inviting. If you don’t have a fire then ensure the fireplace is clean

Make it look pretty
• Make sure the windows are properly dressed with blinds or curtains as naked windows make a place feel
impersonal and run down. Buy some cheap ones if necessary.
• Plants and flowers bring colour, life and light to a room and they also smell delicious. So does that fruit bowl on your
kitchen counter.

Get the right smells
• Bad smells are the single biggest turn off for prospective buyers. Don’t just cover them up, fix the source of the smell.
Clear drains, wash bins, open windows, air the kitchen from old cooking smells, get rid of furniture that is embedded
with cigarette smoke, and wash any grimy bed sheets
• If you are a smoker, place bowls of vinegar around the house and leave out for three days. Though the vinegar will
smell when you open the windows it will disappear quickly taking a most of the stale cigarette smell out with it.
• Conversely, good smells can make a property feel like an alluring home. While it might be impractical to bake fresh
bread, cakes or brownies for every viewer that visits your home, you could perhaps brew some fresh coffee

Obvious conversions
• If there are any obvious conversions – adapting the garage into extra rooms or going up into the loft – and you have
some spare cash, why not take advantage of this cash cow rather than letting the new owners make easy money out
of improvements. You should usually recoup your money
• If you don’t have enough spare cash to make the conversion, consider getting planning permission anyway.

Updated Stamp Duty Rates from today until 30th September.

Stamp duty is fairly straightforward for most property sales now up until the end of September.

  1. No stamp duty is payable on property purchases under £250,000.
  2. For property purchases between £250,000 and £925,000, 5% of the amount over £250,000 is payable (for example, if a property sold for £260,000, it would be 5% of £10,000 not 5% of £260,000).
  3. Additional amounts are payable for transactions over £925,000
  4. It is important to note that there are different rules for first time buyers (no stamp duty up to £300,000), additional properties (3% surcharge), and non-UK residents (2% surcharge).

The Stamp Duty Land Tax Calculator on the gov.uk website is a helpful tool to use if you or a prospective buyer are struggling to calculate the stamp duty payable on a transaction.