Demand from homebuyers for conveyancing quotes was 101% higher at the end of March this year than the average for the same date during the previous four years, according to data from the comparison site for home movers, reallymoving.
Conveyancing quote volumes began to accelerate around Budget Day (3 March, 2021) when the Chancellor announced an extension to the existing Stamp Duty holiday and a tapering of the tax saving to the autumn, as well as news of a mortgage guarantee scheme for 95% loans. By mid-March, quote volumes were 51% higher than the average and continued to accelerate to reach 101% by the end of the month.
First Time Buyers leading the charge
Despite the fact that they benefit the least from the Stamp Duty holiday extension, the volume of First Time Buyers seeking conveyancing quotes also accelerated sharply in March. Demand accelerated, rising to 111% higher on the 30 March than the average for the same date during the previous four years.
A survey by insurance company Canada Life in November 2020 found that a third of adult children had moved back in with their parents during the pandemic, providing many with a unique opportunity to save for a deposit. They will also be encouraged by several high street lenders signing up to the government’s new mortgage guarantee scheme, meaning a greater choice of high loan to value mortgages will soon be available – and fears of a further surge in prices prompted by the Stamp Duty holiday extension.
Households feeling flush
Households have accumulated £125 billion in excess savings throughout the pandemic, according to the Bank of England’s Monetary Policy Report published in February 2021, equating to an average of £5,000 per household. While many households have been hit hard, a large proportion have seen their financial position improve dramatically as income has remained secure with little opportunity for spending.
At the same time, spending more time at home, including working, has prompted families to reconsider their home and whether it meets their current needs – and whether a relocation may now be a viable option as some element of home working becomes the norm.
Reallymoving’s CEO Rob Houghton said, “It’s a strong seller’s market and demand is continuing to grow as we head further into spring, encouraged by the launch of government-backed 95% loans and the Stamp Duty holiday extension. Many homebuyers have cash in the bank, money is cheap to borrow and, with the end of lockdown in sight, people are feeling optimistic about a future where they may be less tied to an office-based 9 to 5 [job], giving them greater freedom to live where they choose.”
“The housing market is usually a reliable indicator of consumer confidence and if this level of demand is anything to go by, the Chancellor may get the summer consumer spending spree he’s hoping for.”
Image: Growth in buyer demand relative to 4 year average.