Stamp duty holiday extension and 95% mortgages to generate more revenue for agents
07 April 2021 7063 Views
The property market has performed strongly in recent months as the impact of the pandemic has encouraged more people to move home, combined with the financial incentive of the stamp duty holiday.
Market commentators were concerned that after the original end date of the stamp duty holiday (March 31), high levels of activity would drop-off sharply.
However, following the recent Budget and the Chancellor's decision to extend the stamp duty holiday by an additional three months, the impressive number of transactions going through can be sustained for a while longer.
On top of this, to ensure buyers of less expensive properties continue to benefit from a lower stamp duty bill, the nil threshold will be reduced from £500,000 to £250,000 between July 1 and September 30. This means the pre-pandemic stamp duty threshold of £125,000 won't return until the start of October.
Alongside the much-anticipated extension to the stamp duty holiday, the Chancellor also used the Budget to launch a new mortgage guarantee scheme which will allow buyers to purchase a home with a deposit of just 5%.
By lowering the amount buyers need to save to get on the property ladder, the government is aiming to turn 'Generation Rent' into 'Generation Buy' with this new initiative.
Now the dust has settled on the Budget, what do these policies mean for agents' ability to complete more transactions and generate additional revenue during the spring and summer months?
Budget policies could encourage thousands more home moves
As a result of the stamp duty holiday extension and launch of the 95% mortgage guarantee scheme, demand for homes from prospective buyers is likely to remain high for much of 2021.
High demand also encourages sellers to enter the market as they look to take advantage of the opportunity to sell quickly and for a good price.
For agents, this means the chance to facilitate even more transactions and generate more income through commission fees and referrals.
Analysis from Rightmove shows the impact of the announcement of the 95% mortgage scheme. Within 30 minutes of the Budget, traffic to its mortgage calculator jumped by 85% and overall traffic to Rightmove surged by 16%.
The property portal also estimates that the initial three-month stamp duty holiday extension could see an additional 300,000 transactions complete, saving buyers a combined £1.75 billion.
It must also be noted that the continuation of the stamp duty holiday until the end of September - albeit at a reduced threshold - will encourage more buyers to enter the market and contribute towards even more completed transactions.
At this stage, it's unclear what impact the new June 30 and September 30 deadlines could have for activity levels, so it's important that agents take advantage of favourable conditions now as the stamp duty buzz won’t last forever.
Generate more revenue by introducing homemoving services
With a higher number of transactions going through, there are increased opportunities for agents to increase their revenue per transaction.
One of the most effective ways to do this is to earn referral fees by introducing additional homemoving services such as conveyancing, mortgages, utilities, TV and internet.
Having the best internet and TV packages has become an increasingly important priority for homemovers and that's before you consider the impact of the pandemic, which has seen people spend enforced periods of time at home and increased homeworking.
Research from Which? found that 9 out of 10 people think that a broadband connection is essential to everyday life, alongside food, housing and utilities.
Meanwhile, a study from an online estate agent revealed that slow broadband could knock up to 24% off a property price and GoCompare.com named a good, reliable broadband connection as the eighth most important feature when it comes to selling a home.
Agencies which provide market-leading TV and internet services that can be installed as soon as possible and with minimum hassle can add value for consumers while also increasing income during a busy period for the market.
By partnering with Virgin Media and referring home movers, agents can improve customer satisfaction and drive a new revenue stream with the opportunity to earn a fee when movers take Virgin Media's TV, broadband, mobile or home phone services.
Virgin Media is a household brand, renowned for its premium products and ultrafast speeds. Its broadband services are available in 15.3 million homes across the UK and steadily growing, with 5G mobile connectivity available in 100 locations across the UK.
Agencies which partner with Virgin Media benefit from on-shore account management, as well as training and marketing support.
If you want to find out more about how you can generate additional revenue by referring Virgin Media’s services to property buyers and tenants, contact: email@example.com.
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