2021 on track to be the strongest year for home purchases since at least 2007

This year will likely be the strongest year for home buying activity since at least 2007, according to UK Finance (Victoria Jones / PA) (PA Archive)

This will likely be the strongest year for home buying activity since at least 2007, according to a trade association representing mortgage lenders and other financial firms.

Home mover activity declined somewhat after the end of a recent stamp duty holiday, but remained positive with activity strongest away from southern England, UK Finance said.

He said that, provided there is no full reversal in activity at the end of the year, “buying activity in 2021 is expected to reach its highest level since 2007”.

The number of home purchases in 2006 was slightly higher than in 2007 – and UK Finance believes this year’s total could potentially even exceed 2007 levels and be the highest since 2006.

But a few weeks from the end of the year – and home buying activity now less frenetic than it was at the start of the year – the final outcome is not yet certain.

Activity in 2022 will inevitably be weaker than this year, but improving labor market outlook prompts cautious optimism

Eric Leenders, UK Finance

Homebuyers rushed earlier in the year to make the most of the discounts offered under the stamp duty holiday in England and Northern Ireland, leading to a sharp acceleration in activity. The holidays were tapered from July and ended completely in October.

Similar holidays had also taken place in Scotland and Wales.

The UK Finance report said: “After the unprecedented spike in lending in June, as borrowers rushed to complete home purchases before the end of the second phase of the property tax exemption on duty As a stamp, activity levels have fallen sharply.

“This pattern is predictable and familiar, with homebuyers moving forward with their purchases in order to save a significant amount of money in what is usually the most significant financial commitment they will make in their lifetime.

“However, the drop after the June deadline was significantly smaller than after the previous stamp duty changes, as the third and final phase of the exemption remained in place until the end of September.”

Stamp duty is not the only factor driving the movements in 2021.

The report states that as employers introduced more flexible work models, “homeowners who were previously limited by relatively low levels of equity with which to ‘move up’ the housing ladder in the city where they can now work in a different location, where their existing equity will go further ”.

Eric Leenders, Managing Director of Personal Finance at UK Finance, said: “After the end of the leave scheme and the stamp duty holiday, activity in 2022 will inevitably be lower than this year, but the outlook will improve. the labor market leads to cautious optimism.

“However, there are downside risks, particularly from rising inflation, which could constrain activity.

“Although our data shows that the vast majority of clients manage their loans well, lenders continue to provide tailored tolerance and support to borrowers who need help.

“Anyone experiencing financial difficulty should contact their finance provider as soon as possible to discuss the options available. “

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