The cost-of-living crisis does not seem to be deterring the property market as today’s statistics show that the seasonally adjusted estimate of UK residential transactions in August 2022 is 104,980, which is 7.6% higher than August 2021 and 1.1% higher than July 2022.
This may be a result of people looking to move sooner rather than later to take advantage of the current reasonably low interest rates as its predicted that as soon as tomorrow the Bank of England will once again hike up rates making mortgages that much more unaffordable.
For some time the tidal wave of problems associated with the cost-of-living crisis was set to finally put an end to ever increasing house prices.
However, the rumours revealed this morning that at the mini-Budget on Friday another stamp duty cut might be announced could provide the housing market with a new lease of life.
“Part of the reason why the housing market defied expectations during the various lockdowns was due in part to the frenzy whipped up by the stamp duty holiday put in place by Sunak.
However, while the tabled stamp duty cut could once again get the market motoring. It could also provide another hammer blow for first time buyers who may not be rejoicing about this news.
First-time buyers already didn’t have to suffer stamp duty on properties costing less than £300,000 but may now need to compete in a market with often more well capitalised buyers.
This doesn’t even take into account the huge house price increases we have seen over the past year making saving for a deposit near impossible without outside help.
If a stamp duty cut is announced on Friday, it may be enough to quell potentially dropping house prices as a result of people soon opting to stay put and avoid moving costs in the face of the energy crisis, double digit inflation and soaring food costs.
Buyers could once again be tempted to move despite the macroeconomic backdrop.
Once again, a lifeline has been thrown to a housing market could be described as already very bloated. Property transactions may therefore increase in months to come as demand increases.
Karen Noye is mortgage expert at Quilter