The Portsmouth property market and the UK have defied predictions by economists. Considering that the economy is a shell of what it was before, unemployment has hit the roof at 11.9%, leaving the government with no other option than to borrow almost half a trillion pounds to enable smooth management of Coronavirus.
Although the pandemic hit the government hard, the impacts did not deter Portsmouth homeowners’ zeal to return home. The mandatory regulation to work from home and lockdown influenced people emotionally and helped them save money on Stamp Duty Tax bills.
A strong wave swept the Portsmouth property market, and people wondered how long it could stand the tide. Is it likely to crash, settle calmly or will it tumble and emerge strongly as always?
Factors that influence Portsmouth property market
According to the Land Registry, house prices in the UK went up by 4.7% in a year, but the surge in prices was only at 3% in Portsmouth. Property owners have nothing to worry about as the market is looking up across the country as per data provisions. The registry provides data several months behind on completed house sales; the information might not reflect the current market prices.
Portsmouth house prices to ease after the Stamp Duty Holiday
In the recent past, anecdotal findings predict that clients use their saved Stamp Duty to pay for their dream home in Portsmouth. However, it is likely that once the Stamp Duty holiday lapses in Spring, Portsmouth properties will depreciate. As a result, buyers will keep their money for Stamp Duty tax payment.
Mortgage approvals
Mortgage approvals are better to tell how the property market is doing because many buyers will opt to service one. Lending institutions are where absolute numbers are recorded: for example, the Bank of England numbers show that they approved 97,500 mortgages towards the end of 2021.
You should always take the help of residential property solicitors in Portsmouth before you make your decision to buy or sell a property because they can offer expert legal advice.
The figure increased from the monthly 65,400 marking the highest surge in approvals since September 2007. It was a third higher than the number of mortgage approvals in February 2020 during the property market days of Boris Bounce.
Nationally, beating 2019’s total mortgage approvals of 524,000 is yet to be challenged. It is also good to note that not all mortgage approvals directly translate to people moving home as property sales fall through.
It is significant that most Portsmouth people buying or selling homes might not accomplish the plans. This is because of the change in Stamp Duty rules in March 2021, hence the delay and huge backlog with mortgage lenders and authorities, solicitors, searches, and property surveyors. A combination of these factors ends up slowing the entire process.
If you are already in the buying chain, talk to all concerned parties constantly to ensure they are focused on delivering. Getting feedback from them fast is a show of accountability, and you can get the new house sooner. Also, if one party pulls out of the chain before the end of the Stamp Duty holiday, you lose the discount cause the chain breaks.
End of the Stamp Duty Holiday in March
Moving homes in Portsmouth automatically drop sharply once the stamp duty holiday ends, and it is the most significant influence on the Portsmouth property market. Property prices will go up after the stamp duty holiday, but the number of sellers does not influence house price crashes.
People may have varying reasons for selling their property in 2021, like the loss of jobs that rampantly cut across the world. Property sales that are influenced by hostile forces are known as forced sales. In 1988 and 2008, business owners faced bankruptcy due to credit crunch and job loss.
As a result, house prices in Portsmouth went down because the market flooded with property for sale in a limited period. There was the cushion of Bounce Back Loans, Furlough, and Mortgage Holidays in the same window for nine months. Interest rates and loan amounts also fueled the property market crash.
Interest rates will determine the future of the Portsmouth property market
During the two market crashes in1988, 2008, mortgage interest rates were at 11.5% and 6%, respectively. Compared to today’s market, mortgages were more expensive than the current 0.1% rate. Also, 77.2% have fixed rates, with only 1 in 21 mortgagees owing over 90% of the home value. In 1988, negative equity was the main issue where 1 in 303 mortgagees owed over 95% of the home value.
Most Portsmouth homeowners stand a better chance to sell their homes than in 1988 and 2008. Sellers are likely to hold on to their property until there is a positive activity in the Portsmouth property market. When property owners sit on the property, those affected are estate agents, solicitors, and home removals people.
Investment opportunities are exciting things that might happen if Capital Tax regulations change. Those who wish to do business need to keep their ears open and forge relations with relevant agents in Portsmouth so they know when it’s time. You may not know when property portfolios are up for sale because they may sell off the market.
Influencing factors to the future of Portsmouth property market
Portsmouth property market (surfer) has appreciated by 46.8% since 2009, and here are the influencing factors.
- Ultra-low interest rates mean that borrowing money is cheap, and mortgage payments are low, which might remain for a while.
- Increase in housing demand as the annual net migration is 214,400 since 2009. This means that more households (96,700) are required every year.
- Since 2008, people have lived longer in the UK, hence a delay in releasing property to the market. This means that there is a need for over 290,850 households in the UK for every extra year of life.
NOTE: All these factors are constant because of COVID-19.
Conclusion
The country has built 165,100 homes on average annually since 2009. The instability of supply and demand shows that the surfer will have long-term house demands, and the ultimate verdict is that the property market in Portsmouth is looking up. A culmination of these issues means that the demand for suitable housing in Portsmouth is for the long haul as long as the property meets the tenants’ needs.
Story by Cyndy Lane
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