A mortgage rate of less than one per cent will heat up the home loans market today.
Nationwide Building Society is launching the 0.99 per cent deal for those able to pay a hefty 40 per cent deposit and a £1,499 fee. Nationwide is also cutting rates of selected mortgages by up to 0.20 per cent, including some for first time buyers.
Moneyfacts.co.uk said signs of competition are starting to show. The website's Racheal Springall called it a 'change for the better'.
A petition launched earlier this month for the stamp duty holiday to be triggered upon exchange of contracts, rather than completion, has attracted more than 10,000 signatories. The petition, which was started last month by an individual who is looking to take advantage of the existing stamp duty holiday, has proved popular with buyers and sellers, as well as agents, conveyancing solicitors, mortgage lenders and surveyors.
Chris Holland, who created the petition, told EYE: 'People are finding themselves becoming trapped in a scenario whereby house prices are much higher and at the same time they will now miss out on the stamp duty holiday. People are being punished financially from both sides, this from a policy that was designed to do the exact opposite. Exchanging contracts is exactly what it says. A contract, a legally binding agreement, to purchase a house often with an immediate 10% deposit being paid. So why shouldn't you benefit from the stamp duty holiday being triggered at that moment of exchanging contracts, rather than at the point of completion? This will allow in particular particularly new build buyers, with continuous building delays due to Covid-19, to benefit from this policy'.
Reaching 10,000 signatures means the government must now respond to Mr Holland's petition.
The chancellor Rishi Sunak previously bowed to pressure and eventually extended the stamp duty holiday beyond 31st March, amid concerns that thousands of buyers could fail to complete before the deadline.
Petitions posted on Westminster's official petition.parliament.uk site are considered for a debate in parliament if they accrue more than 100,000 signatures.
Property Industry EYE
House price inflation could hit ten per cent this summer, economists have predicted. It would mean buyers having to pay about £22,000 more on average than a year ago. Experts said even though this year's surprise boom was 'unsustainable' in the long term, prices were forecast to continue going up for the rest of the year - and to rise again in 2022 and 2023.
Robert Gardener, chief economist at Nationwide Building Society, said house price inflation was likely to move into double digits in the next couple of months, following a dip in values during the early months of the pandemic. He warned that the longer-term- outlook was difficult to predict. 'It will be a question of how resilient the labour market is,' he said. 'Will unemployment spike? If so, that could impact adversely on the housing market, slowing activity sharply. Or will any increase in unemployment be limited by a steep recovery in the economy? If so, that will augur well for house prices.'
Andrew Wishart, property economist at forecasters Capital Economics, predicted house price inflation would average three percent a year between now and the end of 2024, as long as interest rates remain low. He said: 'Without increases to interest rates, which are unlikely until 2025 at the earliest, we see no reason why the market should correct.'
House prices are continuing to soar across the country - but London is not rising as fast as other areas, with the gap between the capital and the North now at its narrowest for eight years.
The average price of a property coming on to the market this month hit a record £333,564, according to Rightmove, up 1.8 per cent on a previous high last month.
And while the typical London home is still 2.9 times more expensive than in the north of Britain, this is the smallest gap recorded by Rightmove since 2013. Prices in the capital have risen by just 0.2 per cent since the pandemic began, but Wales has seen a 13 per cent rise, the North West 11 per cent and Yorkshire and the Humber 10.5 per cent.
Mark Manning, of Yorkshire estate agent Manning Stainton , said he had seen a 'vast number of buyers from around the country, particularly the South'.
One in six homes is selling for more than the asking price as buyers scramble to complete deals before the end of the stamp duty holiday. The figure is the highest it has been for seven years, according to estate agents.
Mark Hayward, chief policy adviser at NAEA Propertymark, said the boom was being fuelled by the stamp duty holiday, which means buyers pay no tax on the first £500,000 of a property's value until June 30th, as well as post-lockdown demand for more spacious homes. He added, 'The imbalance of supply and demand means it's an extremely strong sellers' market. Properties are selling quickly and for over the asking price and this is something we expect will continue in the coming months.'
NAEA Propertymark's research found that 16 per cent of homes sold for more than their asking price in March, the highest figure since May 2014. Each property was found to have 13 buyers chasing after it on average.
The average number of sales agreed per estate agent branch last month was 12, which is also the highest for the month of March since 2007. And about 33 per cent sold for less than the original asking price, which is the lowest on record.