Property sales increase by nearly 50 percent as market sees busiest month since 2007

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The report, issued by HMRC, reflects residential transactions completed in February 2021 and highlights the unadjusted figure of 147,050 residential property sales in the UK last month, with a 23 percent increase in completions when compared to January, and a 48.5 percent increase when compared to February 2020. This makes last month the busiest February since 2007, which was of course pre-Credit Crunch, when there were 147,120 residential completions on an unadjusted basis. The busiest month on record is March 2016, when there were 176,570 residential completions ahead of the introduction of increased SDLT for landlords and those purchasing second homes as of April 2016.

For context, the average number of homes sold in the UK each month is around 98,000.

What perhaps makes today’s figures even more astonishing is that although it feels so long ago, last February actually saw a strongly resurgent housing market following on from the December General Election and the final Brexit denouement.

As lockdown was introduced in March, the Covid-19 pandemic hadn’t yet hit the housing market last February, so the 99,000 completions were an increase of one percent on the same time the previous year and were considered by many at the time to be the sign of a busy Spring market to come.

Fast forward 12 months, and what was then a resurgent market is now fast turning into a property boom, driven for the most part by the stamp duty holiday scheme introduced last July.

Peter Ambrose, Managing Director of leading London property law firm, The Partnership commented: “The latest figures from Land Registry for February are starting to show the impact of the last six months of activity in the property market.

“The sharp spike in work from August onwards is making its way through the process, with these figures reflecting purchases that completed in December and January.

“Given that on average cases are taking about five or six months, I would expect to see March to be even higher than this.

“A spike at this time of year is unusual, as we would not normally expect to see this until much later, but the stamp duty holiday extension until the end of June has meant that the pressure has continued without interruption.

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“We’re finding that the vast majority of our new clients instructing us now are asking for an end of June completion.”

Mr Ambrose continued: “The Government’s new scheme where buyers only need five percent deposit will have a huge impact, especially for first time buyers, and probably create even higher sales numbers over the summer.

“We are waiting for the announcement in April so we can start to get an idea of the scale of what this will involve.

“It’s similar to last year when the property market, already bouncing back strongly from Brexit and lockdown, was supercharged with the announcement of the stamp duty holiday; now a strong 2021 market looks set to be boosted even further by low interest, low deposit mortgage products being re-introduced which will no doubt open up opportunity to more buyers.”

Tomer Aboody, director of property lender MT Finance, observed: “With the strongest housing market in more than a decade, both home buyers and investors are taking advantage of historically low borrowing rates.

“These favour both those buying a property to live in and those seeking rental assets for yield, significantly boosting the number of transactions.”

Mr Aboody added: “With the extension of the stamp duty break, further buyers have decided that now is the time to buy with a potential saving of up to £15,000 to tempt them.

“This saving, along with high loan-to-values and cheaper mortgages, is making it a sellers’ market, with buyers waiting in the wings to pounce.

“Many are prepared to pay higher prices than the past few years so as not to miss out, which is pushing values even higher.”

Marc Von Grundherr, Director of London estate agents Benham and Reeves has seen first-hand how rapidly market sentiment has escalated in the Capital in the last few weeks alone and agreed: “With the fires of buyer demand well and truly stoked right through until September at the very least, we can expect to see an unwavering increase in market activity remain in the short-term.”

Mr Von Grundherr concluded: “This will include a consistent increase in the level of transactions completing as the market continues to work tirelessly to clear the backlogs that have built at the back end of the sales process.

“As a result, the number of transactions completing across the market should continue to reach some of the higher levels seen in recent times.”

With figures today from property software firm Yomdel suggesting that consumer traffic to estate agent websites has increased by an average of 96 percent when compared to the same period last year, yet property search website Zoopla’s most recent house price report highlighting that the overall number of properties available is now 13 percent lower when compared to the average in 2020, the numbers tell their own story.

Unless more sellers come to the market soon, the vast majority of buyers will see any savings they may have made during the stamp duty holiday wiped out by escalating prices.

You can hear more from Louisa on the latest episode of The Property Show Podcast

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