Episode Details

The UK housing market is rebounding fast after a tax cut by the Chancellor Rishi Sunak, according to the property website Rightmove.

The number of sales agreed in England soared by 35% in the five days following Rishi Sunak's announcement on July 8, Rightmove said.

The property market was showing signs of recovery, from a low in April, with agreed sales in England up 15% in June. 

Sunak raised the threshold for paying the stamp duty tax on property purchases up to £500,000 until March 31, 2020.

Rightmove added that asking prices rose by 3.7% between June and July, with Estate Agents reporting increased interest and a shortage of property for sale.

However, mortgage lenders Nationwide and Halifax reported falls in house prices and mortgage approvals which slumped to the lowest on record in May, according to Bank of England data.

Rightmove said buyer enquiries across the UK since the start of July leapt by 75%. 

Last week, Andrew Bailey, the Governor of the Bank of England, said there were signs of activity returning "quite strongly" in the housing market.

During the lockdown visits to Rightmove's website fell by 40% and most agents were closed for business.

The news comes at a time when hardly a day goes by without another announcement of redundancies and losses by a major employer. As many as 9 million workers are still on furlough and the OBR said unemployment could reach 4 million if the economy does not bounce back quickly.

Mortgage shortage coming as lenders start to tighten their belts, due to Coronavirus

Mortgage loans are being squeezed as lenders reduce number of products

Banks have informed the Bank of England that the supply of credit will fall this summer due to coronavirus pressures.

Lenders are taking a cautious approach to offering home loans, which is understandable in the current market where borrowers face uncertainty over their jobs and income. Lenders fear the number of borrowers defaulting on repayments could rise again.

Borrowers are reporting long delays in getting mortgages agreed and processed as lenders deal with backlogs.

Is it still worth investing in buy-to-let property?

Investment in buy-to-let properties can still be profitable when done professionally. However, there are still many other opportunities to make money in property without the need for buy-to-let mortgages, large deposits or high rates of tax. 

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