And, for estate agents, it has two direct benefits:
1) More houses are selling
When the Government announced the stamp duty holiday, it was essentially giving a £4bn tax cut to would-be homebuyers.
Individuals looking to buy could save up to £15,000 if they complete by 31st March 2021.
If people were thinking about buying in the not-so-distant future, they now had every reason to bring that purchase forward.
And of course buy-to-let landlords were also getting an incentive to expand their portfolio sooner rather than later.
2) It’s disproportionately impacting more expensive properties
Research from Rightmove showed that the biggest surge immediately after the stamp duty holiday was announced was for properties priced between £400,000 and £500,000 – with a 49% increase in enquiries on these properties compared to just a 1% increase on properties under £300,000
This makes sense – first-time buyers are already exempt from stamp duty for purchases under £300,000, so this new change has a minimal impact on such properties.
Plus, because the people most benefiting from the stamp duty holiday are likely to be cash-rich (or at least high-deposit) buyers – and eager to complete before any potential second lockdown – they aren’t likely to quibble over a few thousand pounds here or there.
The result for estate agents? A lot of eager people, wanting to move quickly, and happy to pay more to do so.
Why 2021 might be difficult
Times are good for estate agents, and you should definitely make hay while the sun shines.
But we can’t forget – this is temporary.
These probably aren’t ‘extra’ purchases, but next year’s purchases made sooner. Come 1st April, there’s every chance we’ll see lower demand than usual as those who were thinking of moving have already brought their purchase forward.
The sale needs to be completed by 31st March. That means the process probably needs to start in early January to stand a chance of getting through in time, and even that isn’t guaranteed.
Between increased demand for solicitors and searches, and existing backlog from the lockdown, it’s likely to get messy as some people find they can’t complete before the deadline.
Then there are other issues – would-be buyers putting plans on hold due to job-security fears, those that are able to buy being jittery if house prices start to fall, concerns over further lockdowns... and a host of other worst-case-scenario events.
The result could be a lean market in 2021.
Sales will still be happening next year, but agents will increasingly find themselves chasing after a reduced pool of both listings and buyers.
The estate agents who come out best won’t be those who scrap and struggle for that diminished pool. It’ll be those who already have other additional revenue streams.
Giving yourself the best chance of success in 2021
You’re busy with all those extra sales at the moment, and it never feels like the right time to start branching out into new areas.
But do you know the wrong time to branch out?
When it’s already too late.
Spending just a little time thinking about additional revenue streams now can help you unlock whole new markets so that you’re ready for 2021.
Calum is a Sales Manager for LandInsight. He is the proud owner of Malcolm, the lovable cockapoo (half Cocker Spaniel, half Poodle) who you may hear in the background every once in a while if you call the office. Malcolm, that is, not Calum.