Housing market is the key to recovery
As we move into the final quarter of the year, the challenges facing us all are as great as ever. Despite the government’s U-turn on workers returning to the office, we decided to keep the MT Finance London office open as we felt it was right for the business. It creates a positive environment for all our staff, something it was hard to create during lockdown when everyone was isolated at home.
We are busy on the enquiries side as investors and purchasers take advantage of the nine-month stamp duty holiday. However, everything has to be pushed over the line with transactions taking longer than usual. The legal process and valuation side of things is slower than we would normally expect, as lawyers and valuers work from home and/or try to deal with their own increased workloads.
One of the big challenges for this quarter was going to be the end of the furlough scheme, with the Chancellor announcing his Job Support Scheme to replace it. However, contrary to Rishi Sunak’s assertions, we feel he should be laying out a long-term plan so as to prevent the UK economy from continuing to lurch from one expensive knee-jerk reaction to another. The job support scheme won’t protect viable jobs in the long run, and it certainly won’t create jobs – it’s simply helping create a zombie economy.
We should be investing these huge sums of money to improve and create safer travel and working conditions in a way which would leave a positive legacy. The Chancellor’s approach is to differ tax repayments, and to hand out cash, feeding inefficiency, which is only going to postpone and further aggravate what is going be a significant recession. This is not sustainable.
No end to the housing mini-boom – for now
Housing market data for the third quarter has continued to astonish. HMRC recorded a 15.6 per cent rise in house sales in August, while Nationwide’s September figures showed continued house price growth of 5 per cent on a national basis compared with the same month last year. Unsurprisingly, given the experience of lockdown and desire for more space this has created for many, both inside and out, coupled with less need/desire to be in the office every day, the popularity of suburban areas continues to surge.
Families looking to upsize and find a better quality of life, with greener spaces and yet still commutable to the cities, are driving this trend. The stamp duty holiday is a huge boost on top of more affordable prices as you move away from city centres, enabling these families to get more bang for their buck.
Yet it’s not just the suburbs and the country that are proving desirable. London property prices also performed strongly in September, as sellers took advantage of the mini-boom to get their homes on the market. Perhaps some are concerned that there will be a possible slide in values once the furlough scheme ends. This could be their best opportunity to sell for quite some time.
2021 – an extension to the stamp duty holiday?
We wait to see how the economy fares next year, but at the moment we have to assume some downwards trend in the market. Hopefully, it won’t be too steep with the government continuing to supply and inject stimulus via stamp duty relief and salary payments, as the ongoing threat of further and more serious lockdowns continues to loom.
The housing market is a vital driver of the UK economy, with the stamp duty holiday making a huge difference. Buyers are putting those savings towards the purchase and/or refurbishment of property, which is driving other areas of the economy. If this hasn’t convinced the government that a full stamp duty overhaul is needed, and an extension agreed, then nothing will. We firmly agree with the Chancellor on one point – the housing industry should be the foundation to keep the UK working.
Short-term lending solutions
In these uncertain times where mainstream lending transactions are taking longer than usual, short-term products are increasingly being used by landlords and investors for refurbishing properties before selling them or refinancing and letting out. MT Finance is able to offer speed and flexibility, with lending decisions made within hours of initial enquiry and funds often released in less than a fortnight. We strive to ensure investors don’t miss out on any time-sensitive opportunities that may come their way.
To find out how MT Finance could help, contact one of our short-term loan experts on 0203 051 2331 or fill in our contact form and someone will be in touch shortly.