If you were hoping for a summer lull during August, think again.
That’s the messages from Nicky Stevenson, managing director of Fine & Country UK, who says that factors such as heightened consumer confidence, low mortgage rates, an increase in the availability of high loan-to-value mortgage products and a continued search for space, continue to support demand from first-time buyers and home movers alike.
“The first half of this year has proved the busiest ever recorded in the housing market with over 880,000 properties changing hands. Nearly 200,000 sales took place in June prior to the stamp duty deadline, over twice the June average from 2011 through to 2019, and the highest monthly total ever recorded. Meanwhile, the Bank of England reported that the value of mortgage lending hit a record £43.8 billion” Stevenson comments.
“The market has drawn breath in recent weeks, new mortgage approvals fell six per cent in June, while buyer demand dipped seven per cent in the four weeks since June 28.
“However, with over 81,000 mortgages approved in June, over 20 per cent higher than the longer-term June average, and agents reporting buyer enquiries remain steady, the market remains buoyant.”
Stevenson adds that with the success of the vaccine rollout, the reopening of selective travel corridors and the removal of the final Covid-19 restrictions, it is unsurprising consumer confidence is on an upward trajectory.
She continues: “Although inflation has breached the government’s two per cent target, there is little suggestion that interest rates will rise soon; mortgage rates remain close to their all-time low and affordability is on par with longer term averages.
“The increased availability in recent months of high loan-to-value mortgage products, thanks to the government-backed guarantee, provides support for both those looking to upsize and make lifestyle changes, and those looking to purchase their first home. Zoopla reports lending to first-time buyers has risen 25 per cent year-on-year.”
Meanwhile the Fine & Country chief says low stock levels continue to underpin prices.
But she does add a note of caution.
“Although the IMF has upgraded its forecast for UK economic growth to 7.0 per cent for 2021, up from 5.3 per cent in April, the direction of the market in the final quarter of the year may well depend on the impact of the removal of government support packages on the labour market and consequently household incomes. Price growth may edge downwards but looks set to remain firmly in positive territory.”