Mortgage choice jumps to 11-month high
Borrowers now have the greatest number of mortgages to choose from since the first national lockdown came into force last March.
Mortgage choice has reached its highest level for 11 months as lenders launch a raft of new deals.
There are currently 3,215 mortgages to choose from, such as fixed rate and tracker mortgages, with different terms, interest rates and incentives.
That’s the highest number since March 2020, when the first national lockdown came into force. There were 5,222 mortgages in the market at that point.
And since October, the number of mortgages available has increased by 42%, the biggest four-monthly rise in choice since 2007, according to financial information group Moneyfacts.
Why is this happening?
Mortgage choice fell sharply in the first half of 2020, as lenders withdrew their mortgages while they reassessed the level of risk that they were prepared to take in the face of the Covid-19 pandemic.
Borrowers with only small deposits were hit particularly hard, with nine out of 10 mortgages for people borrowing 90% of their home’s value withdrawn between March and the end of June.
But the fact that choice is improving again, particularly for people with small deposits, suggests lenders are now less risk averse, while stable interest rates point to increased competition in the market.
Who does it affect?
First-time buyers
There was good news for first-time buyers, with the number of mortgages available to people with just a 10% deposit rising to 248, 88 more than in January.
First-time buyers have not only seen an increase in product choice, with the number of deals available for those with a 10% deposit nearly quadrupling during the past four months, but interest rates on the mortgages have also fallen.
In a further sign that competition is returning to this sector of the market, the average cost of a two-year fixed rate loan for someone borrowing 90% of their home’s value fell by 0.09% during the past month, while the cost of a five-year fixed rate deal dropped by 0.07%.
Despite these improvements, choice remains very limited for people with only a 5% deposit, with just five deals currently available, down from eight in January.
Existing homeowners
There is also good news for home-movers and people looking to remortgage, as the number of different deals available to choose from has increased significantly, with nearly 500 different mortgages available for people borrowing 60% of their home’s value.
The cost of a mortgage has also fallen for people with large equity stakes of at least 40% in their home.
After being on a steady upward trajectory during much of the second half of last year, interest rates charged on a two-year fixed rate mortgage for these borrowers have dropped by 0.05%, while rates on five-year fixed rate deals have fallen by 0.07%.
What’s the background?
In a further sign that the mortgage market is stabilising after a turbulent year, the number of days for which individual mortgages are available before lenders withdraw them rose from 28 days in January to 40 days.
The move is good news for potential borrowers as it gives them a better chance to secure the deal they want before lenders replace it with a different offer.
Eleanor Williams, finance expert at Moneyfacts, said: “This, coupled with overall average rates remaining quite static and availability continuing to improve, could imply the mortgage market is now the most stable it has been since the onset of the pandemic last year.”
Top three takeaways
- Mortgage choice has reached its highest level for 11 months as lenders launch a raft of new deals
- There are 3,215 different mortgages to choose from, a 42% increase since October
- The number of mortgages available to people with just a 10% deposit rose to 248, 88 more than in January
Rental demand soars in commuter belts
Our latest rental market report reveals tenants are looking for larger homes outside of city centres.
The search for space in the face of the Covid-19 pandemic is driving a mini-boom in the rental market, pushing rents higher, our latest Rental Market Report shows.
The ‘once in a lifetime’ reassessment of housing needs seen in the sales market is also influencing the rental one, as people look for larger properties in commuter zones or well-connected towns.
The rise in demand in these areas is pushing rents higher, with the average cost of being a tenant in the UK, excluding London, increasing by 2.3% year-on-year, putting rents back to pre-Covid levels.
Overall demand has risen by 21%, with houses letting 30% quicker than they were 12 months ago.
Despite these increases, affordability remains fairly stable, and you will need an average of 32% of your salary to cover your rent.
What’s happening in commuter areas?
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A halo effect has emerged in the wider commuter zones of the UK’s largest cities as tenants look for more space, both indoors and outdoors.
Rents in well-connected towns have registered strong growth, rising by 8.2% in Rochdale, 8% in Hastings, and 5.8% and 5.5% in Southend and Newport in Wales respectively.
By contrast, the easing in demand in cities across the UK has led to a slight softening of rents in these locations, with rents dropping by 1.8% in Edinburgh year-on-year, while they are 0.9% lower in Greater Manchester and 0.8% down in Greater Birmingham.
As a result, if you are coming to the end of your current lease in a city centre, you may be able to make some savings by finding a new property.
But while rents in central Birmingham fell by 3.4% year-on-year, the cost of being a tenant in the surrounding boroughs of Bromsgrove, Sandwell and Wolverhampton has risen by an average of 5%, buoyed by demand from renters who no longer need to commute on a daily basis.
If you are looking to move into a commuter area, be sure to shop around to make sure you secure the best rental deal.
You should also be prepared to move quickly, especially if you are looking for a family home, as these are being snapped up.
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Try to build up a rapport with local agents in your preferred area, so that they can alert you when new listings that meet your criteria come on to the market.
What’s happening in London?
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The impact of Covid-19 on the rental market has been amplified in London, with demand for properties in the capital down 10% year-on-year, on the back of working from home policies, reduced international travel and close to zero tourism.
These factors have led to rents in Greater London dropping by 8.3%, the steepest annual fall since the Global Financial Crisis.
But this fall is being exaggerated by declines in higher value, dense rental markets, such as Kensington and Chelsea.
By contrast, several outer London boroughs are still reporting rental growth, with the cost of being a tenant rising by 2.6% in the past year in Havering and by 1.1% in Enfield.
At the same time, the downturn in London rents is showing signs of easing, edging down by just 0.4% in December, the smallest monthly reduction since February 2020.
Meanwhile, new supply in London is up 30% year-on-year, creating more choice for potential tenants and exerting downward pressure on rents.
What’s the outlook?
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The outlook for the rental market depends to a large extent on how quickly a vaccine can reduce the impact of Covid-19 and enable normal business activity to resume, particularly in city centres.
Even then, flexible working is likely to continue, meaning there may be a permanent shift in priorities for some renters.
The demand for space is unlikely to diminish any time soon, which will continue to support the rental market for family homes.
Overall, the uncertainty created by the pandemic, rising unemployment and limited mortgage availability for buyers with small deposits will continue to drive demand for rented homes.
This demand, combined with a lack of new supply nationally, will support rental growth in the long run.
Our head of research, said: “Changing working, commuting and tourism patterns were felt very quickly in the central London rental market.
“Now we are seeing the impact in other city centres, although on a more modest scale. Balancing the rental declines in inner cities is the strong rise in rental growth in surrounding ‘halo’ areas and well-connected towns across the UK, reflecting stronger demand in many of these markets among a cohort of renters.
“Yet it is important to note that most demand among renters living in central cities is within the same area - some renters will have ties to an area through schooling, or non-office-based work.”
Revealed: how long it's taking buyers to complete in 2021
With housing transactions taking longer than normal to wrap up, find out how you can improve your chances of beating the stamp duty holiday deadline.
The average time it takes for a home sale to cross the line is now just under four months – around a fortnight longer than normal.
Most buyers who agreed a sale in 2020 would have expected to complete by 31 March 2021 under usual circumstances, according to our House Price Index.
However, the average time for an agreed sale to complete has surged from 90 days to 110-115 days.
Why are sales taking longer to complete?
The housing market was one of the bright spots of the economy last year, with 47% more sales agreed in the second half of the year than the same period in 2019. And this has led to a congested sales pipeline.
The stamp duty holiday, introduced last July, has boosted buyer appetite to move home.
The temporary tax break means that nearly nine out of 10 transactions are no longer subject to stamp duty, with the average bill falling by £4,500.
It’s set to run until 31 March, and with savings of up to £15,000 on offer, many buyers are now racing to beat the deadline.
The pandemic has prompted many people to carry out a once-in-a-lifetime re-evaluation of their home too, stimulating home moves and driving a search for space.
What does this mean if you’re hoping to take advantage of the stamp duty holiday?
There is a risk that up to 70,000 sales agreed in 2020 may miss the stamp duty holiday deadline, assuming a four-month completion period, according to our House Price Index.
What is not clear is how many buyers are dependent on the stamp duty holiday.
The more buyers rely on securing the tax break, the greater the risk of a spike in sales falling through if they don’t make the deadline.
If a stamp duty holiday extension fails to materialise, buyers across some housing chains may help to fund stamp duty costs for others in the chain to safeguard completions.
However, first-time buyers will still be able to make a saving after the deadline because under standard rules, they don’t pay any stamp duty on the first £300,000 on homes worth up to £500,000.
What can you do to improve your chances of securing the stamp duty holiday saving?
It’s all about getting prepared now to reduce potential delays.
From getting your paperwork in order, to setting realistic timelines, there are always ways to keep your keep your purchase on track. Check out our top tips for a smooth property transaction.
If you're in a property chain, it’s also worth getting your head around how to manage them. Our guide on how to keep your property chain intact is a handy read.
Your conveyancer plays a key role in the buying process. Our 10-step guide shows you exactly what you’re paying for and how they can help you.
Finally, don’t let industry jargon trip you up. Look up terms you don’t understand in our property jargon buster.
Could the government extend the stamp duty holiday?
While the government will be keen to start raising tax revenues once again, the case for a short, month-long stamp duty extension is growing, to help buyers who agreed a sale in 2020 to complete.
Around 55% of sales agreed in January would complete by the end of March in a normal year – but the proportion this year is likely to be lower.
A petition calling for the stamp duty holiday to be extended has received more than 100,000 signatures, triggering a debate to be held in Parliament.
Responding on behalf of the government, financial secretary to the Treasury, Jesse Norman, said that he could not comment on tax policy outside of a fiscal event, such as a Budget.
He added: “The government will continue to listen carefully to representations from the industry and from those who are planning to buy or sell a property.”
Mortgage approvals hit 13-year high in 2020
The pandemic has fuelled a lot of home moves, buoyed by Rishi Sunak’s stamp duty holiday.
The number of mortgages given the green light soared to a 13-year high in 2020 despite successive lockdowns.
A total of 818,500 mortgages were approved for people buying a home last year, the highest level since 2007.
The increase came despite the level of pipeline loans - in other words, mortgages that have been given the go-ahead but the money has not yet been released - slumping to a record low of 9,400 in May. The housing market bounced back in the second half of the year, according to the Bank of England.
But there are signs that the boom is starting to slow, with the number of mortgages approved in December dropping slightly compared with November’s figure, as the end of the stamp duty holiday looms.
Why is this happening?
Disruption caused by the first national lockdown in March, which saw the housing market shut down temporarily, led to a sharp fall in property transactions.
But the market took off again once restrictions were lifted, unleashing pent-up demand and causing people to carry out a once-in-a-lifetime re-assessment of their housing needs.
At the same time, the stamp duty holiday prompted many people to bring forward purchases in order to benefit from the tax break.
Who does it affect?
It’s good news generally for people needing a loan to move home.
Sales were agreed on more than £300bn worth of property last year, that's 26% higher than in 2019, according to our House Price Index.
But first-time buyers struggled during 2020, as lenders withdrew their low-deposit mortgages.
What’s the background?
With a third national lockdown now in place, would-be sellers appear to have paused in listing their homes for sale, according to our House Price Index.
However, the pandemic continues to fuel buyer appetite, buoyed by a last-minute stamp duty deadline rush.
The mismatch between supply and demand could put further upward pressure on prices, but the shortage of homes on the market is likely to lead to a dip in transactions.
There have been calls for the government to extend the stamp duty holiday to provide further support to the market, but it has so far ruled out doing so.
Top three takeaways
- The number of mortgages approved soared to a 13-year high in 2020 despite successive lockdowns
- The increase came despite the level of pipeline loans slumping to a record low of 9,400 in May
- There are signs the boom is starting to slow, with mortgages approvals dropping slightly in December
MPs debate stamp duty holiday
With the stamp duty holiday due to end on 31 March, Parliament has debated an extension. Here’s what it means if you’re planning to buy or sell a home.
A petition calling for the stamp duty holiday to be extended has received more than 100,000 signatures, triggering a debate to be held in Parliament.
Responding on behalf of the government, financial secretary to the Treasury, Jesse Norman, said that he could not comment on tax policy outside of a fiscal event, such as a Budget.
He added: “The government will continue to listen carefully to representations from the industry and from those who are planning to buy or sell a property.”
Chancellor Rishi Sunak announced in July last year that homes costing up to £500,000 would be exempt from the tax.
It is estimated that nine out of 10 people purchasing a property since the announcement have not had to pay stamp duty, saving an average of £4,500 each.
But as the 31 March deadline for the end of the holiday looms, there have been industry calls for it to be extended.
Responding in December to the petition, the government said: “As the relief was to provide an immediate stimulus to the property market, the government does not plan to extend this relief.
“Stamp duty is an important source of government revenue, raising several billion pounds each year to help pay for the essential services the government provides.”
What’s the background?
The stamp duty holiday was introduced by Sunak in a bid to boost the housing market in England and Northern Ireland during the coronavirus pandemic.
Under normal circumstances, buyers pay stamp duty land tax when buying a property worth £125,000 or more, although first-time buyers only have to pay it on homes above £300,000.
The introduction of the stamp duty holiday raised the threshold at which the tax kicks in to £500,000 for all buyers, amounting to a potential saving of up to £15,000.
Can I still buy before the stamp duty holiday ends?
Yes, but you’ll need to move fast. The time it takes between agreeing a sale and completing is normally just under 100 days.
Our research shows that only 54% of sales agreed in January will complete in time, with that figure dropping to 17% in February.
From getting your paperwork lined up in advance, to smoothing out any wrinkles that may disrupt your property chain, here are our top tips to help you beat the deadline.
What happens when the stamp duty holiday ends?
Once the stamp duty holiday ends on 31 March next year, the former stamp duty rules will apply.
This means buyers can be charged between 2% and 12% tax (or up to 17% if they are a foreign investor) on their property purchase, depending on the value of the home they are buying and if they own more than one property.
“The government is committed to supporting home ownership and helping people get on and move up the housing ladder,” it said.
“When the stamp duty holiday ends, the government will maintain a stamp duty relief for first-time buyers which increases the starting threshold of residential stamp duty to £300,000 for first-time buyers that purchase a property below £500,000."
How much stamp duty will I pay after 31 March 2021?
Stamp duty is calculated as a percentage of the property you are buying. It applies to freehold and leasehold properties, whether you’re buying outright or with a mortgage.
For existing homeowners, the rates are:
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0% up to £125,000
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2% on £125,001-£250,000
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5% on £250,001-£925,000
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10% on £925,001-£1.5m
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12% on any value above £1.5m.
For example, if you buy a flat for £275,000, the stamp duty you owe would be:
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0% on the first £125,000 = £0
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2% on the next £125,000 = £2,500
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5% on the final £25,000 = £1,250
Total stamp duty = £3,750
First-time buyers after 31 March 2021
Stamp duty relief was introduced in November 2017 for first-time buyers to help people step onto the property ladder.
First-time buyers are exempt from stamp duty on properties costing up to £300,000 and pay 5% on the value of a property between £300,000 and £500,000.
A first-time buyer will pay:
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0% on the first £300,000
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5% on the remainder up to £500,000
So a first-time buyer purchasing a £275,000 flat would pay no stamp duty.
For a house costing £475,000, a first-time buyer would pay:
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0% on the first £300,000 = £0
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5% on the final £175,000 = £8,750
Total stamp duty = £8,750
However, if the purchase price is more than £500,000, first-time buyers cannot claim the relief and must pay the standard rates.
For example, a property purchased at £700,000 would result in a stamp duty bill totalling £25,000 even for a first-time buyer.
Landlords and second-home owners
For owners of more than one property, a surcharge of 3% on top of the standard stamp duty rates apply.
However, if you sell a home within three years of purchasing a second property, you can apply for a refund of that 3%.
It is also possible under some circumstances to claim multiple dwellings relief.
What about non-UK residents?
From April 2021, an additional 2% stamp duty levy will be imposed on non-UK residents who buy property in England and Northern Ireland.
It means that international buyers of second homes could pay up to 17% tax on expensive properties.
The 2% is on top of standard rates and in addition to the 3% surcharge for any investors who own property elsewhere.
What other government support is available?
During the second lockdown, the government extended its offer of mortgage payment holidays. Those who need help paying their mortgages can still request a holiday of up to six months until 31 March 2021.
To help first-time buyers get on the property ladder, the government's Help to Buy scheme offers an equity loan of up to 20% of the property value (40% in London). As long as you can raise a 5% deposit, you can then apply for a standard mortgage to pay the remaining amount.
At the Conservative party conference in October, Prime Minister Boris Johnson pledged to “turn generation rent into generation buy” and announced plans for a new scheme to give more people the chance to take out long-term fixed rate mortgages for up to 95% of their home’s value - although details have not yet been released.
What about stamp duty in Scotland and Wales?
Housing is a devolved issue in Britain so stamp duty only applies in England and Northern Ireland.
Scotland and Wales have equivalent taxes:
Scotland
From April 2015, Stamp Duty was replaced by Land and Buildings Transaction Tax (LBTT) in Scotland.
In Scotland, the LBTT rates are:
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0% up to £145,000
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2% on £145,001-£250,000
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5% on £250,001-£325,000
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10% on £325,001-£750,000
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12% on any value above £750,000
First-time buyers pay no LBTT up to £175,000.
Wales
Property owners in Wales have paid Land Transaction Tax (LTT) since April 2018.
LTT rates are:
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0% up to £180,000
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3.5% on £180,001-£250,000
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5% on £250,001-£400,000
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7.5% on £400,001-£750,000
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10% on £750,001-£1.5 million
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12% on any value above £1.5 million
In December, the Welsh government introduced an additional charge for second-home owners.
Second home-owners will now pay a 4% levy when they buy homes up to £180,000, rising to 16% for homes worth £1.6m or above.
Government makes it easier for renters with pets to secure homes
Responsible renters with well-behaved pets to secure leases more easily through Government's new tenancy agreement.
A new standard tenancy agreement introduced by the government will make it easier for tenants with pets to find rented accommodation.
Under the new Model Tenancy Agreement agreed last week, responsible tenants with well-behaved pets will be able to secure leases more easily, as consent for pets will now be the default position.
The Model Tenancy Agreement is the government’s recommended contract for landlords.
With figures showing that more than half of adults in the UK own a pet and many more are welcoming pets into their lives during the pandemic, these changes mean more landlords will cater for responsible pet owners.
What are the current rules for renting with pets?
With few private landlords currently advertising pet friendly properties (only 7%), many people with pets have struggled to find suitable homes. In some cases, this has meant they have had to give up their pets altogether.
Landlords have been able to issue a blanket ban on pets, inserting clauses into their tenancy agreements to state that renters cannot keep them.
If a pet is allowed, the landlord may also put in additional clauses to the tenancy agreement related to owning a pet, such as making sure it doesn’t foul in the garden or inside the property, not leaving it alone in the property for too long and cleaning the property thoroughly before the end of the tenancy.
Any damage to the property or extra cleaning that needs to be undertaken should be dealt with by the tenant. If it isn't, the landlord may deduct these costs from the tenant's deposit at the end of the tenancy.
Will the new Model Tenancy Agreement make it easier to rent with pets?
The new tenancy agreement isn't legally-binding, but the government hopes landlords will adopt it. Through these changes, landlords will no longer be able to issue a blanket ban on pets.
If the landlord objects to the tenant having a pet, that rejection should only be made where there is good reason, such as in smaller properties or flats where owning a pet could be impractical. It should also be given in writing, within 28 days of a written pet request from a tenant.
To ensure landlords are protected, tenants will continue to have a legal duty to repair or cover the cost of any damage to the property.
A responsible pet owner will be aware of their responsibilities in making best efforts to ensure their pet does not cause a nuisance to neighbouring households or undue damage to the property.
Landlords will be prohibited from charging a fee to a tenant who wishes to keep pets or other animals at the property. However, permission may be given on the condition that the tenant pays an additional reasonable amount towards the deposit (as long as this doesn't breach the deposit cap requirements under the Tenant Fees Act 2019).
Housing Minister Rt Hon Christopher Pincher MP said: “We are a nation of animal lovers and over the last year more people than ever before have welcomed pets into their lives and homes.
“But it can’t be right that only a tiny fraction of landlords advertise pet friendly properties and in some cases people have had to give up their beloved pets in order to find somewhere to live.
“Through the changes to the tenancy agreement we are making today, we are bringing an end to the unfair blanket ban on pets introduced by some landlords. This strikes the right balance between helping more people find a home that’s right for them and their pet while ensuring landlords’ properties are safeguarded against inappropriate or badly behaved pets.”
Help to Buy equity loan scheme extended for second time
The government has pushed back the deadline by a further month to help buyers whose new homes have been hit by coronavirus delays.
The government has extended the deadline for the current Help to Buy initiative for a second time due to building delays caused by the coronavirus pandemic.
The so-called qualification deadline – the date by which construction of the property must have been completed – has been pushed back by a further month until 31 March 2021.
The deadline for legal completion for homes being bought under the scheme remains unchanged at 31 March 2021, although under certain circumstances it can be put back until 31 May 2021.
The Help to Buy equity loan scheme enables people to purchase a new-build home with just a 5% deposit, with the government topping this up with a 20% loan that is interest-free for five years.
The current scheme is being replaced by a new version, which is only available to first-time buyers, on 1 April this year.
Why is this happening?
The scheme is being extended for a second time due to the disruption caused to the housebuilding industry as a result of lockdowns and social distancing measures introduced to combat Covid-19.
Despite the qualification deadline having previously been extended by two months, there are still fears that many families hoping to take advantage of Help to Buy could miss out due to delays in their home being constructed.
As the current scheme ends on 31 March and the new one is only applicable to first-time buyers, there was a danger that many people could lose the chance to buy their home, through no fault of their own, if the deadline was not extended.
Who does it effect?
Although the deadline has been extended, it does not apply to everyone.
If you had reserved a property through the scheme by 30 June 2020, the deadline by which the property must be built has been extended until 31 March.
Under certain circumstances the date for legal completion can also be extended from 31 March until 31 May 2021, if building work was severely delay due to the first national lockdown. But housebuilders must receive approval for this delay from Homes England, the government’s housing coordinator.
If you reserved your home on 1 July 2020 or later, you will still benefit from an extension of the qualifying deadline until 31 March, but you must also be able to legally complete your purchase and receive the keys to your property to move in on that date.
If your home has not been built and you cannot move in on 31 March, or by 31 May for those who qualify for the later deadline, you will not be able to qualify for the Help to Buy equity loan.
Your housebuilder must unconditionally release you from your contract and refund your reservation fee. If you have already received an Authority to Proceed from Homes England, your builder is entitled to make certain deductions, but they must tell you about these first. If you have already exchanged contracts, they must also return your deposit.
The Help to Buy equity loan scheme in its current form will still close on 31 March.
What’s the background?
The new Help to Buy equity loan scheme, which is already open to applications, will only apply to first-time buyers.
It will also see the introduction of regional price caps on the value of a property that it can be used to purchase.
These caps range from £186,100 in the north east to £437,600 in the south east and £600,000 in London.
The scheme will run from 1 April 2020 to 31 March 2023.
Top three takeaways
- The government has extended the deadline for the current Help to Buy initiative for a second time
- The so-called qualification deadline has been pushed back by a month until 31 March 2021
- The deadline for legal completion remains unchanged at 31 March 2021, although under certain circumstances it can be pushed back until 31 May 2021
Q&A: 'With the stamp duty holiday due to end in March, we expect to see this housing market activity intensify'
Our Head of research, takes stock of the housing market and reveals info from the latest House Price Index.
Q. Gráinne, what’s happening to house prices across the country?
A. House prices are rising at nearly 4% a year, with the average home now worth £222,900. To put this into context, this is the highest level since August 2017. But the UK headline rate of growth hides a varied regional picture, with growth ranging from 5% in the north of England to 2.8% in the east of England.
House price growth in many areas has been prompted by a mismatch between supply and demand. We have seen demand levels rise by an average of 40% year-on-year, and in some areas by much more, and that’s despite the closure of the housing market during the first national lockdown.
But the flow of homes coming onto the market last year was just 4% more than in 2019. Put simply, there aren’t enough homes for sale to soak up demand – and this is putting upward pressure on house prices.
Our data and forecast models suggest annual house price growth will rise to 5% and then stay there for the first three months of this year.
Q. 2020 was a tumultuous year. So why was there record demand for housing?
A. The housing market was one of the bright spots of the economy last year. The pandemic and its subsequent lockdowns and restrictions led many people, who had spent longer than usual in their homes, to carry out a once-in-a-lifetime re-evaluation of their home and lifestyle, stimulating home moves and driving a search for space, such as an extra bedroom or office space.
This has been captured in our data, which reveals that there were 9% more new sales agreed in 2020 than in 2019. And because it typically takes three to four months to legally complete on a sale, a slice of these deals will spill over into 2021.
We also saw a shift in the type of buyers active in the housing market. More people in wealthier areas, where house prices are typically higher, are planning a move. On the other hand, some first-time buyers have been hit by many lenders pulling their mortgages for borrowers with small deposits.
All of which means that the total monetary value of sales agreed in 2020 is 26% higher than 2019, bringing the annual figure to over £300bn.
Drilling down into the data, it’s worth noting that sales activity in the south of England in particular is coming off a historically low base. So last year’s bounce-back in general housing market activity, combined with higher selling prices, means that the total value of homes sold in the south east and east of England is up 37% on 2019.
Q. What’s the most sought-after type of property?
A. While the value of all types of property is climbing, the search for space that I mentioned is having a knock-on effect on prices.
It has prompted the value of houses to rise twice as much as flats, with the average rate of year-on-year growth for houses standing at 4.3% compared with 1.8% for flats.
Q. Traffic on Zoopla surged by 70.5% on Boxing Day. What does this mean for the months ahead?
A. There’s traditionally a spike in interest in moving home on Boxing Day as people turn their attention to the year ahead. But this most recent seasonal surge was far higher than the 61% increase recorded on Boxing Day in 2019.
And the momentum seems to be sustained, with searches on Zoopla for December up until 26th up 33% on the same time period the year before.
With the stamp duty holiday due to end in March, we expect to see this housing market activity intensify as buyers focus their efforts on securing the tax saving.
Home repossessions set to be put on hold until April
Calls to extend the ban on home repossessions come after a third national lockdown was introduced earlier this month.
Home repossessions are set to be put on hold until April following the introduction of new lockdown measures across the UK.
Regulator the Financial Conduct Authority (FCA) has proposed lenders should not act on repossession orders and take back people’s homes until at least 1 April.
The moratorium on repossessions would apply to both homeowners and landlords of buy-to-let properties.
While the proposal has been put out to consultation until 18 January, it has already received the support of trade body UK Finance, which represents mortgage lenders.
Eric Leenders, managing director of personal finance at UK Finance, said: “The banking and finance industry is committed to providing ongoing support to those facing financial difficulty as a result of the pandemic.
“The industry is fully supportive of a moratorium on possessions remaining in place until 1 April 2021 to ensure customers do not lose their home at this difficult time.”
Why is this happening?
The FCA had previously called for lenders not to enforce repossession orders before 31 January, except in exceptional circumstances.
It is proposing extending this guidance until 1 April due to the worsening coronavirus situation in the UK and the government’s new lockdown measures.
It said the latter meant people could experience significant harm if they were forced to move because their home was repossessed.
What support is available?
Mortgage lenders have introduced a range of support measures to help homeowners and landlords whose finances have been impacted by the pandemic.
The option of taking a mortgage payment holiday, under which people can defer making their monthly repayments for up to six months, has been extended until 31 July, although consumers will have to apply by 31 January if they want a full six-month deferral.
For borrowers who have already taken a six-month payment holiday, lenders are offering tailored support, including accepting reduced payments for a period of time, switching them to an interest-only mortgage or extending their mortgage term.
More than 2.7 million mortgage payment holidays have been arranged since the scheme was first launched last March, with around 127,000 deferrals in place in mid-November 2020.
What should I do if I can’t pay my mortgage?
If you are struggling to keep up with your mortgage payments it is important to contact your lender as soon as possible, as you will have fewer options if you are already in arrears.
If you want to take out a mortgage payment holiday, follow the instructions on your lender’s website, as many lenders have set up an online application process.
If you want to request a different option, such as switching to an interest-only mortgage, you should contact your lender directly.
What’s the background?
The proposal to put repossessions on hold until April follows a similar move to ban tenant evictions until at least 21 February 2021 in England, and 31 March in Scotland and Wales.
The only exception to the ban is for evictions due to anti-social behaviour, illegal occupation, fraud or rent arrears.
Landlords are also required to give their tenants a six-month notice period if they want to evict them until at least 31 March.
Top three takeaways
- Repossessions are set to be put on hold until April following the introduction of new lockdown measures across the UK
- While the proposal from the FCA has been put out to consultation until 18 January, it has already received the support of trade body UK Finance
- The moratorium on repossessions would apply to both homeowners and landlords of buy-to-let properties
Lockdown 2021: ban on tenant evictions extended until February
The government has extended the ban on bailiff evictions for a further six weeks.
Tenants in England are being protected from eviction for at least a further six weeks.
The government is extending the ban on bailiff evictions for all but the most extreme cases until at least 21 February 2021.
The only exception to the ban is for evictions due to anti-social behaviour, illegal occupation, fraud or rent arrears of more than six months, as well as cases of domestic abuse in the social sector.
Communities secretary Robert Jenrick said the measures would be kept under review, and landlords would be required to give a six-month notice period to tenants until at least 31 March.
A pilot scheme is also being launched in February to offer mediation between landlords and tenants facing court proceedings for eviction to try to help the two parties reach a mutual agreement that keeps people in their homes.
What’s the background?
The government first introduced a ban on tenant evictions in England in March last year. Court eviction hearings were also put on hold.
The ban ended in September, but a new grace period was introduced between 11 December and 11 January in England and Wales to ensure no-one was evicted during the festive period.
Evictions were 86% lower between July and September 2020 than they had been in the same period of the previous year, while no repossessions were recorded between April and the end of September, down from 14,847 a year earlier.
Who does the new agreement affect?
England
Under the latest extension of the ban, tenants in England cannot be evicted until after 21 February, although the government said in reality, it did not expect any evictions until 8 March at the earliest.
Landlords will also have to give their tenants at least six months’ notice if they are being evicted before 31 March.
Wales
Tenants in Wales have been given even more breathing space, with the ban on evictions extended until the end of March.
Evictions will still go ahead, however, in cases of anti-social behaviour or domestic violence.
Scotland
The latest ban on evictions does not impact tenants in Scotland as they are already protected under separate legislation.
In September, Nicola Sturgeon’s government extended its coronavirus-related eviction ban until March 2021.
What are my rights as a tenant?
It is illegal for a landlord to evict you without giving you written notice or obtaining a court order.
If you are in an assured shorthold tenancy, the most common type of tenancy, they can start the eviction procedure through giving you either a section 21 or section 8 notice.
Your landlord does not need to give a reason to evict you under a section 21 notice, but they must give you a warning period, which is currently of six months, and you cannot be issued with a section 21 notice during the first four months of your original contract.
If you do not leave the property at the end of this period, your landlord must go to court to evict you legally.
Landlords can only issue a section 8 notice if they have legal grounds to end your tenancy, for example if you are in rent arrears. They must apply to a court for a possession order to evict you.
A landlord is not allowed to harass you or lock you out of your home, even temporarily, while they are waiting to evict you.
For more on your rights as a renter, read our guide here.
What should I do if I can’t pay my rent?
If you are struggling to pay your rent, it is important to talk to your landlord as soon as possible.
If you can still afford to pay some of your rent, ask your landlord if they would accept a reduced payment for a period of time, particularly if you think you will be able to make up the shortfall once your finances have recovered.
It is also be worth checking to see if there are any government benefits available to you.
The government has made £180m available for Discretionary Housing Payments which councils can distribute to support renters who need help with their housing costs.
Top three takeaways
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Tenants in England will be protected from eviction for at least a further six weeks
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Similar measures have been announced in Scotland and Wales
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People struggling to pay their rent are advised to talk to their landlord as soon as possible and check whether they are eligible for any benefits