Harrogate – Post Budget – a Housing Hotspot

An initial rush, a steady pace, a stumble and then a surge toward the finishing line. This narrative could describe an athletic race and sometimes mirrors the UK property market year but not in Harrogate.

All through 2020 we were told by the mainstream media that house prices would fall due to national lockdowns and the pandemic. We never ever agreed with these forecasts for Harrogate , said so and were right. 2020 was a record breaking year for Harrogate (and us) on sales at steadily increasing prices.

Anyway , moving on,  post budget we are now very confidently forecasting a buoyant year ahead for the property marketplace in Harrogate & District.

In brief – a number of the new budget measures will boost our already strong market

The Stamp Duty holiday on properties up to £500,000 will be extended from March 31 to June 30.From July 1, the holiday will apply on properties up to £250,000 but only until the end of September. On the 1st of October the pre-Covid stamp duty thresholds and levels will resume. However it is fair to say that from the start of July until the end of September the maximum Stamp Duty saving buying property will be just £2,500 – considerably less than the £15,000 saving possible right now.

Please note – Private Landlords who have incorporated will be disappointed to know that Corporation Tax is set to increase from 19 % to 25 % from April 2023. There will also be changes to how it is applied, especially for smaller companies, and this is likely to reduce the benefits of private BTL(Buy to Let) investors incorporating into a company.

The Chancellor has confirmed that there will be government-guaranteed 95 % Mortgage Loans available for Buyers from April, on the purchase of properties up to the value of £600,000. ( however, this may not to apply to investment purchases ).

He also has said that there will be a 100 % Business Rates holiday until the end of June and thereafter Business Rates will be discounted by two thirds up to a maximum of £2m for larger businesses.

Our forecast.

Prices and demand will continue to rise locally during March and beyond accelerated by the new Stamp Duty holiday. However when the Stamp Duty tax is fully reinstated there could be a small stumble in price growth / transactions but this will be short-lived for the following reasons:

  • Buyers will be Buyers – we just can’t help ourselves – we all aspire to own our own homes – and bigger is better.
  • Borrowed money is cheap now and may get even cheaper. The 0.1% Bank rate could go negative. This means that today’s variable mortgage rate of 2.25% per annum could drop below 2%, as may fixed rate products.

What single factor has fuelled house price growth in Harrogate and elsewhere more than any other in recent decades? Its cheap money which encourages more borrowing with inevitable higher property prices due to increased demand

All this is not as scary as the BBC would have us believe. Our economy is not on its knees and we have one of the lowest unemployment rates in the world at around 5% – and set to decrease as our lockdown restrictions are phased out on the back of one of the most successful mass vaccination programs of all times.

A rapidly recovering economy ?  too true –  its estimated that there is £100bn in unspent consumer cash sitting out there waiting to be deployed by consumers when we exit the final lockdown  – all being well – this summer.

Let’s all look forward to a buoyant property market and healthier happier days ahead for everyone.

If you wish to discuss the above or are interested in the Property market in Harrogate then please contact us for a free no obligation chat about the property services we provide in Residential Sales & Lettings.

Charles.

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Estate Agents
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