A new industry survey has highlighted the potential beginning of the end for the major house price boom seen over the last nine months.
The UK Residential Market Survey, published by the Royal Institute of Chartered Surveyors (RICS), show a decline in new house listings on the market, as well as new buyer enquiries and agreed sales.
House prices have reportedly increased, although slightly fewer respondents have seen an increase as in previous months. For property solicitors in Surrey specifically, house prices have seen an increase of 8 per cent compared to the same time last year.
The same survey found that 30 per cent of people who responded expect prices to continue to increase over the next year.
When it comes to enquiries by new buyers, 28 per cent of chartered surveyors noted a decline in interest, which ends seven straight months of high demand, and could be a result of the window for the stamp duty holiday closing entirely as February begins.
As a result of both a huge rush of sales, as well as lower staff in more remote locations, the overall sales process, from initial offer through to conveyancing and the final exchange of contracts is reported to take over four months on average.
The reason for this is the increased pressure on conveyancing solicitors and local authorities as a result of so many sales going through the sales process with a reduced staff working in remote locations.
Of the 613,000 estimated sales still going through the legal process, Rightmove estimates that 100,000 will need to pay the normal rate of stamp duty at the end of the process.
As a result, many prospective buyers who started getting interested in late December or early January were at a tipping point where a slightly complicated purchase may have cost a new buyer up to 15 per cent extra on the price of their new home.
This has led to a gradual decrease in interest, as new buyers have more time to consider their purchase without a 31st March deadline to be concerned about. As a result, 18 per cent of surveyors surveyed noted a fall in sales being agreed.
Somewhat related, 38 per cent of respondents found a decrease in the number of homes being put onto the market, again related to the stamp duty holiday deadline, as well as the pressures of the third national lockdown encouraging some late arrivals to the market to stay put.
However, the situations that have caused people to consider moving have not necessarily left. House space has become significantly more critical as more households need a home office and more outdoor space.
These needs have taken priority over being within commuting distance of a workplace as more work is undertaken remotely, and there is a growing trend of businesses making remote work a permanent part of their structure.
It remains to be seen exactly what the end of the financial year will have in store, but projections suggest less of a decline but a slowing down of the market compared to the frenetic pace we saw in 2020.
