Residential Property Review – June 2021

Posted on 29 June, 2021

Renting less expensive than buying a property
Research from estate agency Hamptons, suggests that renters are better off than buyers for the first time in five years. The study found that, just prior to the pandemic in March 2020, the average buyer with a 10% deposit was better off than renters by £102 per month. In May 2021, however, buyers were found to be worse off by £71 per month on average, spending £1,125 on mortgage repayments against the average £1,054 for renters. This pattern has extended to most of Britain’s regions, with only three regions (North East, North West, and Yorkshire and the Humber) cheaper for buyers than renters in May 2021. On the other hand, London buyers have been hit hardest, going from being £123 better off a month buying (March 2020) to £251 better off renting (May 2021).

Stamp Duty holiday taper approaches
The temporary Stamp Duty nil-rate threshold of £500,000 (applicable in England and Northern Ireland) will end on 30 June, with a tapered threshold of £250,000 then applying until the end of September. From July, the maximum saving buyers can make will fall from £15,000 to £2,500. This will make June an exceptionally busy month for the property market, says Knight Frank, with buyers racing to complete their transactions for maximum savings. Indeed, the number of offers accepted in May, was the highest monthly figure in a decade, and 55% higher than the same month in 2019. However, it is expected that activity will fall off in July as the Stamp Duty threshold falls and the holiday season makes its return….

Value of mortgages rises
Bank of England (BoE) mortgage data for Q1 2021, has revealed an increase in the value of outstanding mortgage loans over the past year, reflecting heightened buyer demand for property. The outstanding value of all residential mortgage loans at the end of Q1 2021 (£1,561.8bn) was 3.6% higher than the end of Q1 2020, while the value of gross mortgage advances soared by 26.5% to £83.3bn in the same period….

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