On the move: Why now is the time to buy and sell in Hertfordshire
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The loosening of lockdown restrictions combined with the stamp duty holiday means business is booming in the local housing market. Richard Burton spoke to St Albans and Harpenden agents to find out more.
It wasn’t just pubs and hairdressers that found themselves in demand over the past few weeks. Estate agents, many of whom had faced months of inactivity, found themselves with unexpected levels of interest as the country came out of lockdown and went house-hunting.
Hertfordshire fared particularly well, especially in the prime middle market as families decided to move out of London, where prices are slipping, and into the countryside.
And with many suddenly finding they could work remotely, they’ve been widening their search beyond the traditional commuter areas, creating new prime locations with one leading chain describing it as “a remarkable recovery”.
Prices at the top end of the market have also held their own, reflecting a growth trend that on a national level saw demand for those above £1 million up 48 per cent year-on-year at the end of June.
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Then a further boost came in the shape of Chancellor Rishi Sunak’s stamp duty holiday, which increased the threshold to £500,000 for property sales until March 31 next year. It also meant that anyone buying more expensive properties will only be taxed on their value above that amount.
That means that not only does it wipe out the tax for anyone buying below half a million – about nine in 10 buyers – but higher-end purchasers can save as much as £15,000.
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To do the sums, this means houses between £500,001 and £925,000 will be taxed at five per cent and 10 per cent on anything between £925,001 and £1.5 million. Anything above that will be taxed at 12 per cent.
Before this announcement, stamp duty was paid on anything sold for £125,000 or more by anyone other than first-time buyers who were enjoying their own discount, which meant they didn’t pay it on anything under £300,000.
This new so-called holiday replaces that, and also extends to landlords and second home buyers, although they will still have to pay the extra 3 per cent they were charged under the previous rules.
The effect was immediately seen as a further boost to a market that showed signs of a significant revival from the moment lockdown measures were eased.
Nick Ingle, who leads the residential team at Savills in Harpenden, said: “Market activity has been buoyed by pent-up demand, in part at least, but we have been surprised at the extent to which lockdown has made people reassess their housing needs and, more pertinently, act upon it.
“In the years I’ve been working in the local property market it’s one of the busiest periods I’ve known. The experience of working from home has made people aware of the limitations of their existing homes and increased inside and outside space has become an all-important driver of demand.”
Nick Doyle of Cassidy & Tate in St Albans, described Sunak’s calculations as “very decisive”, adding: “If it had kicked in at, say, £300,000, it wouldn’t have done a lot for St Albans, but pitching it at the level he has, it’s affected everyone in some way.”
So how are agents coping with this new demand in an age of social distancing, when sellers may be reluctant to see a return to the open-house approach that traditionally brought viewers in large numbers – from serious contenders to time-wasters.
“We’re having to be a lot more decisive ourselves,” Nick said, “particularly in the way we handle viewings. We’re getting lots of requests but we’re just not able to accommodate everyone so we’re having to sort the wheat from the chaff, which means parking up quite a few and being selective.
“We not only need to be sure of their ability to proceed in terms of whether they have an offer on their own home, for example, but whether they’ll arrive knowing what they want.
“At the moment, we don’t really want someone turning up to discover something they weren’t aware of. We often encourage people to do their research first, even if that means having a look on Google Earth, and be sure before they set off.”
Steve Walker of Collinson Hall in St Albans agreed that the stamp duty freeze was a major driver for the post-lockdown market.
“When we came back, there was a lot of movement in the mid-market which was positive but not sustainable in the longer term as the first-time end needed help, and I think this will give it the kick it needed.
“In fact, the way the chancellor has set it out means it will have an impact across the whole market so there are no losers in this.”
On the wider market, he said, there are “a lot of positives, particularly with increasing numbers of mortgage products coming back” but agreed that, with rising interest, viewings had to be handled correctly.
“These are still difficult times in terms of how we handle interest so, while try to accommodate as best we can, we do have to set parameters in terms of who we introduce.”
Many agents had begun to make use of video and virtual viewings, which continues to have advantages by ensuring that would-be buyers don’t turn up as if seeing a place for the first time.
Steve, whose firm handles rentals as well as property management, recalls actually letting some homes to clients who agreed to sign up without having physically seen them during lockdown.
“We learned a lot during that time and took it forward when the sales market came back,” he said. “Even now, it’s useful for someone to spend six minutes looking at a video before a physical viewing which often can merely be the confirmation of what they’ve already seen.”
Nick Doyle points out that new hotspots will emerge in towns and cities such as St Albans because commuters won’t limit themselves to central locations. “If someone’s working from home and only going into the office once or twice a week, living that bit further from the station becomes more manageable,” he said.
Nick Ingle agrees that the London interest is growing for “houses that tick all the right boxes” but cautions that buyers tend to be keeping their feet on the ground when it comes to what they will pay.
Lucian Cook, Savills’ head of residential research, estimated that, nationally, new buyer registrations and viewings were 32 per cent and 25 per cent higher than the average in the 10 weeks pre-lockdown, adding: “Right-pricing is key to sustaining current momentum, particularly given the prevailing economic uncertainty which may slow the market in the latter part of the year before a more sustained pick up as coronavirus and Brexit concerns ease.”
But on a broader level, the market as a whole shows signs of the sort of recovery unthinkable a few months ago. Steve summed it up: “So much of the market is driven by sentiment and the mood is very positive at the moment.”