Is now a good time to move home? | moneyfacts.co.uk

Derin Clark

Derin Clark

Online Reporter
Published: 05/08/2020

A survey carried out by Nationwide in May found that the lockdown led to 15% of people considering moving home. Whether homeowners are looking for a new home as a result of lockdown or had already planned to move home this year, since lockdown restrictions began to be lifted, the property market has quickly begun moving again. This, coupled with the Government’s stamp duty threshold increase, means that many homeowners will be considering moving home over the coming months.

For those considering moving, we’ve looked at what currently makes it a good time to move home and some factors homeowners should be cautious about.

Stamp duty threshold increase

Last month, the Government increased the stamp duty threshold in England and Northern Ireland to £500,000 until 31 March 2021, which Nationwide states should mean that 90% of home purchasers in England will pay no stamp duty for the next nine months. As well as this, the Scottish Government has increased the threshold for its Land & Building Transaction Tax (LBTT) to £250,000 and Nationwide states this will result in 80% of homebuyers in Scotland paying no LBTT. Meanwhile, the Welsh Government has also increased the threshold for its Land Transactions Tax (LTT) to £250,000.

As a result of these temporary tax changes, many people buying residential properties in the UK will pay less tax on their house purchases, which will lower the cost of the purchase overall.

You can find out how much stamp duty you will have to pay on a property by using our stamp duty calculator.

House prices rise month-on-month

Already the property industry has reported a month-on-month increase in house prices. For example, data released by Nationwide showed that during June house prices turned negative for the first time since 2012, falling by 1.4% month-on-month, but in July house prices recovered increasing by 1.7% month-on-month. While property prices seemed to bounce back quickly, the July data could be a reflection of house buyers having to put their purchases on hold during lockdown and only being able to proceed when lockdown restrictions eased.

The Royal Institute of Chartered Surveyors’ (RICS) June 2020 UK Residential Survey showed a more complicated picture of the housing market as, although the market did start to see signs of recovery during June notably with an increase in buyer enquires, newly agreed sales and new property listings, RICS also warned that the “12-month sales expectations are now marginally negative”. It should be noted that this report was issued before the Government’s stamp duty threshold increase, but in the report, RICS stated that “the challenging economic climate is likely to dampen market conditions for some time to come”.

Home-mover mortgage rates remain competitive

Home-movers looking for a two or five year fixed rate deal will find that the moving home mortgage charts are currently still highly competitive. For example, in the two year fixed moving home chart, the lowest rate on offer is 1.14% (4.4% APRC) fixed until 31 October 2022. This rate comes from Leeds Building Society and is available at a 75% loan-to-value (LTV). In the five year fixed rate moving home mortgage chart, the lowest rate on offer comes from West Brom Building Society, which offers 1.40% (3.1% APRC) fixed until 30 September 2025 at 60% LTV.

While moving home mortgage rates are low at the moment, over the last few months mortgage lenders have been more cautious with their lending. This has been noticeable with the withdrawal of high LTV and first-time buyer mortgage deals from the market, but as the uncertain economic climate continues, this could result in lenders withdrawing deals or increasing rates on lower LTVs as well.

All the current moving home deals can be found on our moving home mortgage chart. Alternatively, you can speak to a mortgage broker who can help you to find the best deal for your individual circumstance.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

for sale sign outside residential house

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