Market Insight: September 2021
Property has been a hot talking point since the pandemic began early last year, which is unsurprising given how crucial the property market is to the national economy. Aided by a lengthy Stamp Duty holiday put in place by the Government in July 2020, it is fair to say that recovery has been extremely strong over the past twelve months.
With the Stamp Duty holiday due to end this month, is the Wirral and West Cheshire property market looking in good shape for the future?
Market activity eases off over summer months
Having experienced many months of unprecedented listing and sales volumes in the Wirral and West Cheshire property market, a period of declining transaction levels was inevitable.
Monthly volume of new instructions and sales agreed in Wirral and Cheshire West (Rightmove, 2020-21)
Looking at activity levels for the past twelve months (above), we can see that the decline actually started back in April. There was a strong spike in activity throughout March following an extension to the Stamp Duty holiday, which gave some people another opportunity to take advantage of the helpful market conditions.
The first deadline passed in June, which saw the Stamp Duty threshold drop from £500,000 to £250,000. While not as appealing as the original terms, this presented a much-needed comfort blanket to the local property market which may have prevented a sharp drop in activity levels over summer.
Since March, the number of new properties to market and sales agreed have both dropped for five consecutive months. This has been a gradual decrease in activity that has seen numbers resemble a more ‘normal’ market. Bear in mind that we have experienced record levels of sales in the market prior to this period, so this trend is not unexpected at all.
It is also worth pointing out that many more people have been able to go on holiday this summer – both domestically and abroad – which means that disposable income has been shifted from property to leisure. School summer holidays typically contribute to a slow down in the property market, and that effect will have been amplified this year given the circumstances.
How did this summer compare to previous two years?
Looking at the months of June, July and August combined, the Wirral and West Cheshire property market has seen an annual increase in the average listing price on Rightmove from 2019 to 2021. There was a significant 8.9% increase from 2019 to 2020, initiated by the strong demand that followed lockdown and the first Stamp Duty holiday announcement.
Average listing prices for June, July & August combined by year. Colour in reference to % difference from previous year (Rightmove, 2019-21)
The increase from 2020 to 2021 was a much more subtle 0.3% rise, suggesting prices had stabilised leading up to the summer period this year. The good news is that as the Stamp Duty threshold dropped and demand reduced, prices have held firm in the local area.
Most postcodes have experienced year on year summer price increases, particularly in 2020, with some still rising well again this year. According to Karl Tatler data, viewing levels this summer have been very similar to the same period in 2020, which is positive news for the future of the property market as we near the end of the Stamp Duty holiday on 30th September.
Average weeks to agree a sale on Rightmove for Wirral & West Cheshire postcodes this summer (June, July & August 2021)
Property in the area continues to sell quickly with around 70% finding a buyer within 12 weeks of marketing on Rightmove between June and August this year. Even more impressively, almost one in three properties turn sale agreed within two weeks. This is a strong indicator that despite rising prices, the market is still very buoyant and buyers are prepared to get serious offers in early to avoid disappointment.
Will the local property market continue to thrive?
The first key factor to consider when trying to predict the future of the local property market is the impact of the Stamp Duty holiday. There’s no denying how critical it has been in accelerating activity levels and property prices over the past twelve months; without that initial incentive to buy property there’s very little chance that the market performs this strongly over a long period of time.
The Stamp Duty holiday comes to an end on the 30th September, which means the threshold returns to the pre-pandemic level of £125,000 (unless you are a first-time buyer). There’s certainly no pressure on the market to continue providing activity levels experienced in recent months, but it would also be concerning should activity levels drop off significantly.
As it stands, there is nothing to suggest that will happen. The slow down in activity has been gradual over the past few months as we begin to return to a more familiar property life cycle. Viewing levels and applicant registrations have been consistent at Karl Tatler in recent weeks, which means there is still a healthy appetite to buy property.
What the market really needs going forward is more stock to help satisfy the demand that is clearly still present for Wirral and West Cheshire property. We will contiune to monitor the market as we head into the winter months, which will hopefully provide positive outcomes even after the Stamp Duty holiday comes to a conclusion.
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