Ahh, Christmas. It’s a time for relaxing by an open fire with a glass of mulled wine and a fat mince pie. As December continues, and the fancy chocolates in the advent calendar dwindle, agents usually start to wind down and look forward to a well-earned rest.
December isn’t totally quiet, of course. There’s the usual plethora of property particulars to prepare for the New Year. But after the hustle and bustle of autumn, and the scramble to get deals over the line before the holidays, agents can normally exhale and reflect on the year that was.
2020 has been anything but normal, however. After an unexpectedly busy summer, Christmas 2020 looks set to break the mould too. Home movers remain determined to take advantage of Rishi Sunak’s stamp duty holiday before it expires in March. Therefore the holiday season is unlikely to give property professionals their traditional breather.
A festive rush
Although it’s something of a cliché that December is a slow month – there are still some highly-motivated buyers around and realistically-priced houses still sell – this Christmas build-up is certainly proving to be unusual.
Whereas many sellers tend to take their property off the market in December, and perhaps launch with a new agent in the New Year, this winter they’re determined to agree a sale before the holidays begin. Some are even reducing their asking prices to secure a pre-Christmas deal and then save money on their onward purchase.
Agents, therefore, find themselves as busy as elves in Lapland as the winter solstice approaches. This is despite many lenders reducing their range of mortgage products, plus the general economic uncertainty caused by both Covid-19 and Brexit.
The stamp duty effect
Rightmove normally reports a significant drop in activity in December, followed by a surge in web traffic from Boxing Day as families start thinking about their New Year plans. However, although experts usually advise against putting your property on the market at this time of year, the stamp duty carrot is proving irresistible.
This year’s pre-Christmas period is currently the busiest for more than a decade – even though only half of sales agreed are likely to make the March deadline. Demand is currently 34% higher than that this time last year. What’s more, house prices have continued to rise: they increased by 0.9% in November following a rise of 0.8% in a record-breaking October, which was the busiest time for transactions since March 2016. The significance of this particular month? Investors were rushing to beat the 3% stamp duty surcharge on second properties at the time.
These statistics show that nothing creates a buoyant market like stamp duty incentives. Not even November’s second lockdown has curtailed enthusiasm for moving home. Indeed, if anything, the tightening of pandemic restrictions merely reaffirmed people’s desire to move away from city centres to properties with generous outside space.
Will it last?
Whilst demand will inevitably ease off slightly in the coming weeks, it’s still well above the norm for the time of year (especially in the over £500,000 price bracket). Meanwhile, the prospect of a third national lockdown or ‘circuit breaker’ is unlikely to affect the market if November’s experience is anything to do by.
The promising news on the vaccine front is also bound to boost confidence. Although the stamp duty holiday will come to an end in March, and furlough will end simultaneously, the vaccine rollout should be well underway by then. Indeed it could coincide nicely with the regular spring surge in demand.
Consequently, it’s possible that the market’s merry Christmas could continue into a happy new year. Whilst it’s true that most experts believe the market will run out of steam in 2021, it’s important to remember that the market has defied expectations before.
Maybe the great British public will emerge from this dark economic winter with a spring in their step and an appetite to move home. And if not, well, at least agents will finally get that well-earned breather.