No one would argue that 2020 has been an unprecedented year for the new homes market owing to Covid-19.
As the pandemic took hold, we saw some uncertainty across the market and not surprisingly a reduction in the number of applicants registering their property search requirements with our Branches. Naturally, this included first-time buyers (FTB) and consequently the number of people using Help to Buy (HTB) Equity Loans across England fell by 40% compared to the same period in 2019.
However, I’m delighted to say we did trade at levels of around 50% of ‘normal’ during the period April and May, which was an out-performance of the regular property market, quoted by RightMove as being 10% of normal volumes. This in the main was down to the first time buyer market, both in outright sales and in Shared Ownership where stock remained an incredibly attractive proposition. This was especially true amongst key workers in the wider sense, whose desire to have homeownership was heightened due to the reasons we all understand. Since then, H2 has seen a massive turnaround, with a buoyant market supporting the extraordinary efforts of our teams to secure unprecedented sales volumes for the Countrywide New Homes division. This is reinforced by our HTB applications which have increased by 36%.
The reason for this success?
In part, it’s thanks to new Government incentives (more on that later) and the pent up demand to move home which built from earlier in the Year.
However, it’s also due to the resilience, expertise and professionalism of the Countrywide New Homes team. Despite the obvious challenges posed by the pandemic, they have pulled out all the stops to deliver a first rate service – not only helping applicants to buy and sell their home but also providing expert support in mortgage and financial services, ensuring buyers secured the best deals in a rapidly changing landscape of interest rates and lending criteria. In order to support our developer clients, we’ve also bolstered the team’s capability by appointing additional industry experts in marketing & research and also shared ownership & affordable homes. As a result, we now offer the very best advice available to allow the decision-making process to become more robust and reliable as developers look to re-start paused projects or indeed commence new ones.
The Help to Buy Scheme
As many of you will know, this is currently going through a period of change. For applications submitted from 16th December, it’s now available for First Time buyers only and will also be the subject of regional price caps. The scheme has already proved extremely popular with FTBs, 80% of whom have an average equity loan of £73,000, interest-free for 5 years. Approximately 18% of Countrywide’s total applicants are registered as FTBs, whilst in the new homes specific market, we see close to 50% of all of our sales go to these buyers. This figure is higher than last year and I’m confident our share of the FTB market will continue to grow in 2021, given our unique position to support developers and buyers in the sector.
Stamp Duty Holiday
The Stamp Duty holiday (running until 31st March 2021) has been another important Government incentive, allowing property purchases under £500,000 to be exempt from SDLT. In the months following July’s announcement of this, we saw new applicant activity increase by 40% across all sectors and 28% across the FTB market. Whilst there is a traditional surge of online activity between Christmas and New Year, I also fully expect applicant activity to significantly increase in the very early part of 2021 as people rush to take advantage of that Spring deadline. You can find out how much the Stamp Duty Holiday could save you with our calculator.
An unprecedented year
So, despite an unprecedented year, the Countrywide New Homes Team has provided a first-class service to both home buyers and sellers, as well as unrivalled support to developers, be they national PLCs, private or affordable housing. That’s why our portfolio continues to grow at an impressive rate compared to the industry standard and why, despite all of the challenges of Lockdowns and local restrictions, we have already arranged sales on over 25% more new homes than we did during the whole 2019.