The changes to stamp duty has seen the sales agreed in London boosted by 27% as buyers save thousands on purchases.
First time buyers and home movers are saving thousands from the stamp duty holiday in regions with more expensive property and according to Zoopla House Price Index sales agreed are 27% higher in London.
For an average house price of £479,300 in London the stamp duty saving would be £13,965 and this could help them first time buyers increase their deposit or send more on furnishings.
This boost is absent in other regions and not responding to stamp duty changes where average prices for the UK are lower at £219,500, so the benefit will remain in the South East and London regions.
The largest rise in sales volumes has been in Scotland and Wales rising 40-50% as the delay in reopening has boosted the rebound.
124,000 lost house sales for 2020
The lockdown due to Covid-19 is expected to impact sales volumes more than house prices with 124,000 lost house sales during 2020.
In total Zoopla estimates this is -15% lower than in 2019 and is a better result expected at the beginning of lockdown.
This table from Zoopla shows the leading ten city house prices and growth over the year to June 2020.
| City | Current price | Annual growth |
|---|---|---|
| Nottingham | £158,800 | 4.5% |
| Manchester | £174,500 | 4.1% |
| Leeds | £170,300 | 3.6% |
| Leicester | £184,400 | 3.1% |
| Liverpool | £122,800 | 2.9% |
| Sheffield | £139,300 | 2.8% |
| Bristol | £282,400 | 2.8% |
| Birmingham | £168,100 | 2.8% |
| Edinburgh | £233,600 | 2.6% |
| Cardiff | £211,900 | 2.3% |
Growth in house prices has been strongest in the North of England with the city of Nottingham posting annual growth of 4.5% and average property values of £158,800.
For remortgage buyers living in these cities the higher property values could mean they can release capital with a further advance to make home improvements such as to a kitchen or bathroom.
London has also seen a rise in property values up 1.7% over the year compared to a fall in prices this time last year -0.8% and only Aberdeen has seen prices lower by -2.4%.
The return of higher house prices in London allows the equity release buyer to access wealth using a lifetime mortgage and maintain their lifestyle or give a child or grandchild the deposit on their first home.
Housing demand unlikely to leave cities
During the Coronavirus lockdown there has been an expectation that demand for homes in cities would decrease as people work from home rather than commute to an office.
Zoopla conducted a survey that shows 55% of commuters expected this to reduce, however, this view has not reduced demand for property in regional Northern cities.
Demand in 2020 is highest for Sheffield, Liverpool, Manchester, Nottingham and London compared to last year and the Northern cities have also seen the strongest house price growth.
Although Covid-19 has increased demand for homes outside cities, Zoopla sees this as an exception rather than a shift in buying attitudes as buyer priorities for homes change to include garden or outside space.
For buy-to-let landlords this could influence their next property purchase to include more space and a garden for homes typically outside cities to attract future renters.
There is likely to be further rebalancing of demand and type of homes between cities, suburbs and commuter towns.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay an interest only mortgage or help your children start or expand a business.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator.
