The average price of a property listed on the market dropped by 0.9% in January, according to data collected by Rightmove.
The average price of a property listed on the market dropped by 0.9% (£2,887) in January, according to data collected by Rightmove.
Rightmove believe prices have dropped to tempt buyers to purchase before the stamp duty holiday conclusion.
The data also outlined that new buyers are now unlikely to beat the deadline, as the average time to complete a purchase has reached over four months.
There is a logjam of over 613,000 properties sold subject to contract still awaiting legal completion.
Rightmove predicts that around 100,000 will face an unexpected tax bill as they miss the deadline.
Nevertheless, visits to Rightmove are up by 33%, the number of buyers contacting agents is up by 12% and the number of sales agreed is up by 9% for January so far compared to the prior year.
Despite temporary market closures in 2020, people’s housing needs meant the number of sales agreed was up by 10% for the whole year versus 2019.
Furthermore, more agents are now offering online viewings to help people find their next home safely, with home-hunters encouraged to shortlist properties before choosing which ones to go and see in person.
Tim Bannister, director of property data at Rightmove, said: “As we enter the new year and a new lockdown, the housing market remains open but is focused on the imminent end of the stamp duty holiday and on the challenges of the pandemic.
“These major influences on mover behaviour are clouding the 2021 outlook, but Rightmove’s early January market-leading indicators of buyer demand and the number of actual sales being agreed are looking robust, showing that there are many compelling reasons other than the stamp duty savings to make buyers enter the market in 2021.
“Both metrics are up substantially on the same eleven days of January a year ago, which itself was a brisk start to the year due to buyers reacting favourably to the certainty of a majority government.
“That certainty at the beginning of 2020 was replaced by nearly a year of pandemic uncertainty, though the major difference between the first lockdown and this one is that the housing market is open.
“Movers’ changed housing priorities due to the lockdown can therefore be more readily satisfied, though obviously estate agents will be carefully following government safety protocols, with more offering online viewings to help buyers to make shortlists and to cut down on the number of physical viewings that are taking place.
”While the tax savings were an added incentive, movers’ desire for more inside and outside space seems to be continuing, and this new lockdown could be a spur to act in 2021 for those who can and who did not do so in 2020.
“However, there are still a huge number of sales agreed in 2020 that are stuck in the processing logjam and awaiting legal completion, with many hoping to beat the impending tax deadline.
“For those who fail to do so, there may be difficulties if they have factored the tax savings into their budget calculations.
“The challenge of processing so many transactions in less than three months is made even tougher by the new lockdown restrictions, COVID-19 sickness and homeschooling further reducing capacity in conveyancing, legal searches and mortgage lending.”