The housing market has seen yet another year of resilience that no one could have accurately predicted in the face of a pandemic at the start of spring in 2020. The UK housing market surprised and stood strong during Brexit, and again in the pandemic. Even with the continued uncertainty about lockdowns and Covid variants, the housing market is surging. In April the average selling price reached another record high at just over £258,000.

Halifax noted there was an increase in April of 1.4% in the average house price. In fact, house prices are increasing at the fastest rate in five years.

The credit of the current housing market demand has been given to many different issues or factors. Of course, no one would push aside the influence that low interest rate borrowing offers to home buyers. In addition, the pandemic lifestyle forced many to reevaluate their dwellings and how they function in them. Now it appears the dream home of many offers more green space, a garden, a place within to study, to work from home, engage in family meals, areas to accommodate fitness goals, new hobbies, and entertainment.

Yet, the credit that most have offered as to the surge in the last few months has been the stamp duty holiday. It was set to end at the end of March, but it was extended to the end of June. A reduced tax will follow from July through September. 

In an effort to save money and escape the tax, home buyers rushed to complete their mortgages and buy their homes before the deadline in March. A surge in buying was seen in the months leading to the prior deadline. Once the extension was announced, buyers increased demand and supply grew smaller. Thus, the rise in asking prices and selling prices and the push upward in the average UK house price.

The weeks in which a home buyer could potentially shop and choose a home and then obtain a mortgage is narrowing as the new deadline of the end of June nears. It is not likely, according to experts, that the deadline will be extended again and instead the reduced tax amount will kick into effect at the first of July through September. 

No one is certain if home buyers will still be as motivated. Perhaps asking prices in the market will have risen out of reach of many. The again, the house prices could begin to lower and bring into focus buying opportunities for those that had been shut out.

It is certain the economy has been boosted by home buyers. Not only the housing market but all of the associated business that surround setting up a new home and moving have benefitted. Without the full stamp duty holiday tax to motivate buyers, it is anyone’s guess as to how buyers will react and the impact it will have on the economy as it struggles to recover post pandemic.

Meanwhile, for those focused on buying, it could be a smart move to shop aggressively and get into the que for obtaining a mortgage as the lending market is crowded and the process has been slowed. If the stamp duty tax holiday is your motivator then there are only weeks left to save.