This is our take on what is currently happening in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.

  • Is self-build the answer with prices high and supply constrained?
  • An increasing number of purchases on hold as the market booms

Is self-build the answer with prices high and supply constrained?

The housing market has boomed in the wake of the Covid pandemic and prices are at record highs and there is seemingly no stop to meteoric rise at present, especially with high levels of demand being sustained and supply constrained. With more of us than ever looking to purchase a “forever home”, one which ticks all the new boxes that have become pre-requisites for purchasers, including space to work from home and outdoor space, and one which is not tied to the geography of commuting as it used to, self-build could be the answer. We are seeing an increase in interest in self-build mortgages as more of us than ever consider this as an option, especially those who have struggled to find a house that they like. Self-build is not just about designing and building your dream home, but may actually be a prudent option in this high price environment with self-built homes cheaper to build than to purchase an existing home, worth on average 25-30% more on completion than they cost to build and then there are savings to be made in terms of SDLT as, if you do not own it you will only be paying this tax on the land itself.

  • The nature of the current housing market is contributing to the rise in interest in self-build finance. The market for self-build finance itself is becoming increasingly competitive with a number of lenders now in this space. We suspect, unless we see a significant fall in prices, this is a trend that is here to stay…
  • Even though self-build financing is more expensive than a standard fixed-rate mortgage on account of the fact it is more specialist and there is greater risk to the lender, the potential for capital uplift is huge and you are saving on SDLT, even when the holiday comes to an end…
  • We are seeing clients struggle to find suitable land to do self builds on, and we think planning consultants will be busy for the next few years with planning applications on land without planning to meet this demand.

An increasing number of purchases on hold as the market booms

As the housing market continues to boom, purchasers who could not proceed for a number of reasons are now stuck and having to put their purchase and potential move on hold. For example, we have had clients recently whose purchases have fallen through for a variety of reasons, such as Japanese Knotweed being found at a property, a structural issue found in the property, through to vendors pulling out of the sale. The issue these buyers now face is three-fold, firstly prices may have risen relatively significantly since they put a property under offer with some areas rising faster than others, potentially pricing the buyer out a similar purchase, supply is incredibly constrained and thus they may struggle to simply find a property they like and lastly with the SDLT holiday coming to an end there is now this extra cost to factor in…

  • With it difficult for buyers to find another property we suspect we will see increased chain collapse in the coming weeks as the hassle and stress along with other factors mentioned become too much.
  • This is however indicative of just how great the demand is in the market and thus we do not expect to see house prices fall anytime soon.  
Share this article: