Wed 10 Mar 2021
Mortgage approvals reached their highest level since 2007 last year, according to the Bank of England. Jeremy Leaf, principal of Jeremy Leaf & Co, told City AM: ‘While these figures are always a good indicator of direction of travel for the market, we won’t be getting carried away, not least because the year’s lowest point for these approvals appeared a couple of months after the first lockdown.’
Indeed, Nationwide building society reported that house prices dropped in January as the extension to the stamp duty holiday had not been announced by that point and buyers feared they had missed out on the saving. Jeremy Leaf told The Daily Telegraph: ‘The market is catching up with itself as the chance of buyers and sellers beating the stamp duty deadline by the end of March recedes, even if the Government amends rules to allow contracted sales rather than completed ones to benefit from the cut, as seems possible now.’ He added in The Financial Times: ‘Those likely to miss out on the stamp duty saving due to backlogs tell us they would prefer to compromise on price rather than miss out on the property they have set their hearts on.’
While the housing market enjoyed a buoyant 2020, more than 300,000 property sales fell through. Jeremy Leaf told This is Money: ‘There are a multitude of reasons why property transactions fail, many of which are market-driven such as rising or falling prices, as well as factors which may be outside the control of buyers and sellers.'
Figures from the Office for National Statistics also reveal that house prices rose buy 8.5 per cent in 2020. Jeremy Leaf told BBC News that the market carried on where it had left off in January: 'There is still life in the market as lockdown helps to concentrate many potential buyers and sellers’ minds as far as moving is concerned. Intense speculation remains as to whether the 31 March stamp duty deadline will be extended and we can’t help but have sympathy for many who have started the process several months ago who have been unavoidably delayed by a backlog in searches, surveys, conveyancing, or all three, to say nothing of problems in the new-build industry.'
Figures from HMRC concurred, with the number of house sales leaping 24 per cent year on year in January, as buyers rushed to take advantage of the stamp duty holiday. Jeremy Leaf told The Evening Standard that the decline between December and January showed that the ‘market paused for breath in reaction to further restrictions and another lockdown’
There was much speculation that the Chancellor will extend the stamp duty holiday in the Budget. Jeremy Leaf told The Mail on Sunday: ‘There are still a lot of people out there who are really struggling to complete in time for the current deadline and this could really be helpful to them. Some started their transactions many months ago - in July and August in some cases - and they are still trying to get it done. Those are the people I feel sorry for and so I hope these reports are accurate for their sakes.'