Rishi Sunak has announced a stamp duty holiday with zero charge on the first £500,000 of any residential property purchase. To last until 31st March 2021.
This has been the trigger to give the London property market a massive kick start.
The buying window for investors is obviously from now until March 31st next year.
However we need to be aware of the background which is changing rapidly.
At the beginning of the year, despite perennial residential stock shortages in the Capital, there was plenty of supply, as Brexit woes had stifled the market for the preceding three years.
This has now changed rapidly with the current buying surge driven by the stamp duty holiday.
Building all but ceased for the first half of the year. New starts were stopped or delayed. Current buying activity is absorbing all the existing “built” stock rapidly. Everything screams of shortage in supply now.
Developers are well aware of the situation and buyers need to be prepared for a rapid hardening of attitude which will show in several obvious ways as the market quickly moves from a “buyer market” to a “seller market” over the next two months.
In conversations with the Major House builders and developers last week it was obvious that stock held on all their books was moving out fast and that all were universally of a mind to stop all discounting.
Discounting has been on offer with New Build projects emanating from London for several years now, particularly while Brexit suppressed the market.
With stock disappearing fast we can now expect discounting to stop altogether so investors need to act quickly if they are to get any “special terms”. These will not be available in a few weeks’ time.
Price increases are on the way. Two developer this week have indicated that they are in active internal discussions in respect of raising prices.
This will happen. It is just a matter of when and is going to be dictated by how fast developers’ stock diminishes over the next few weeks.
At the moment buyers still have some power but over the next few weeks, if this boom continues, and we believe it will, the pendulum will swing from a market favouring buyers to a market favouring sellers.
Long-term the market trend is now upwards, so small movements, will not create a lot of change but for those investors thinking of buying, they need to move – now.