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The UK’s property market has rebounded remarkably well from the initial stages of the Covid-19 pandemic. Having suffered notably between March and July last year, when viewing or moving properties was almost impossible, the market has since sprung back to life.
According to the , the average UK house price increased by 10.2% in the year to March 2021. Transactional activity has also risen sharply in the opening months of the year.
What are the reasons for the property market’s resurgence?
Firstly, demand has outstripped supply in the UK property market for many, many years. That is why property prices have risen so impressively over recent decades; data shows that the average price of a residential property in the UK quadrupled from £58,250 in January 1990 to £231,940 in January 2020. As such, it is important to remember that healthy price growth is nothing new.
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Yet there are two further factors at play. For one, the demand that was pent up during the initial lockdown period in the UK (March – June 2020) was then released, with prospective homebuyers and sellers flocking back to the market in the subsequent ten months.
Further, the holiday, introduced by the UK government on 8 July 2020, has also incentivised many people to buy, sell or invest in real estate. So much so, in fact, that there is now a bottleneck of property transactions forming, many of which will simply not be completed before the stamp duty holiday comes to an end (assuming it does).
The initiative was due to end on 31 March 2021, but the government announced a three-month extension to the scheme. As it stands, the stamp duty holiday tapers down from 1 July before normal tax levels return from 1 October 2021.
It means there is a rush among property buyers to get their respective deals across the line. Indeed, at the start of June more than on the government’s website seeking for the stamp duty holiday to apply when contracts are exchanged, just in case the formal completion occurs after the deadline.
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At Market Financial Solutions (MFS), we are not idly waiting to see if the government introduces a further extension to the stamp duty holiday, nor if other solutions are introduced that prevent property investors from missing out on the . Instead, we have taken matters into our own hands by launching a new, creative solution.
In late May, MFS unveiled 753, an initiative designed to fast-track residential property deals in the coming months. We have committed £75 million of funding for residential bridging loans at a loan-to-value of 75 per cent and an interest rate of 0.75 per cent.
As one of England’s leading bridging lenders, we see it as our duty to support both domestic and international investors that are pursuing in London and across the country. The creation of 753 will achieve just that; it will ensure funds can be deployed in a matter of days, giving property buyers the best possible chance of completing on their acquisitions while the stamp duty holiday is in full effect.
by Paresh Raja
Paresh Raja is the CEO of (MFS), a London-based bridging lending company offering fast lending solutions for borrowers and investors. MFS is one of the UK’s fastest growing, independent bridging finance providers.