How the end of stamp duty holiday has affected the market
Whilst there is no question that the stamp duty holiday did bring a lot of Investors into the market and pushed up house pricing, how much of an effect have we seen since it tapered off and will this be a lasting impact?
When assessing the effect on the market, it is worth considering the reasons people move:
- Job
- Health
- Schools
- Retirement
- Financial reasons
- Relationship break up
- Geography
This is not an exhaustive list but it covers the main reasons people chose to move, none of which relate to stamp duty. Whilst these are typical reasons people move, some of them have become even more relevant in the last 18 months or so.
Job
The world has literally been turned upside down since March 2020 and the way we work has been transformed. For some this means they no longer need to be located in proximity to their place of work as they will be permanently home based. July 19th saw the end of most restrictions and guidance on working from home. There will be a large proportion of businesses and workers who see no reason to revert straight back to pre pandemic working practices.
Health
Many of us are guilty of taking our health for granted. The last 18 months however, has really shone a light not just on physical health but our mental health. Being stuck in our house for long periods of time has caused many to ask if it’s the four walls they are staring at that are really right for them. Are they surrounded by any green spaces or have easy access to the coast? We have become far more self aware and people are now making housing choices based on new needs.
Change in circumstances
A house move is often prompted by financial changes such as the breakdown of a relationship. The house is a shared asset therefore if a couple split, it will need to be sold and the profit divided between them. With many relationships facing the additional pressure of lockdown, this has sadly resulted in the breakdown of their partnership.
Geographical reasons
Traditionally moves were driven by a new job that required buyers to be closer to the place of work. Not so now as we have used all sorts of technology to enable us to stay connected regardless of where we are located. It could therefore be the opposite now; there is no need to live in proximity to your place of work, giving you the freedom to live in a location of your choosing, perhaps nearer friends of family. It could also be that your children have got older and you need to think on the next stage of schooling and that means looking at catchment areas so that they have access to a school that suits them.
We won’t know the full impact of the end of stamp duty holiday on the market until October but there are many reasons to feel confident that people will always move and property may in fact become slightly more affordable.