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Despite a 36 percent reduction in transactions from the peak in March, today’s figures reflect the highest transaction numbers for the month of April for over ten years. The provisional seasonally adjusted estimate of UK residential transactions in April 2021 is 117,860, 179.5 percent higher than April 2020 and 35.7 percent lower than March 2021. With 392,170 residential transactions taking place between January and March 2021, this is the highest number of residential transactions for Q1 of a calendar year since stamp duty figures were introduced in 2005.
The property market has been extremely busy over the last few months with house prices set to continue surging.
Figures published by the Office for National Statistics (ONS) this week showed house prices rose 10.2 percent in the year to March, making the average house property in the UK valued at £256,405.
Property experts are warning that the market will continue to be busy in the coming months, despite the stamp duty holiday nil rate band being reduced to £250,000 on July 1, 2021.
This threshold will remain in place until September 30, 2021, before reducing to £125,000 from 1 October 2021.
Louisa Fletcher, Express Property Expert commented on the latest HRMC Residential Transactions data (April 2021).
She said: “It doesn’t make sense to compare the completion figures for last month with April 2020, as obviously we were in lockdown at the same point last year and the number of sales that completed was vastly reduced.
“However, when we look at the figures in comparison to April in previous years, for example 2018 or 2019, we can see that the level of homes sold last month is still higher than we’ve seen on average, which is yet more proof of the current busy market we’re experiencing.
“It’s likely that completions will maintain a similar momentum in May but that we may see another spike in June’s figures, as many of those who decided to start their move in early March when the stamp duty relief deadline extension was announced will be aiming to get in under the wire to make the maximum saving.
“But there is a cautionary aspect in all of this, which is that those who are yet to exchange need to have calculated their moving budgets to ensure that they have the funds available to pay the stamp duty due if they don’t complete before the end of June; although the taper relief will still be available until the end of September, when the relief will reduce meaning that the first £250,000 of any purchase will be exempt from tax payable on purchase, that’s still a lot to find if you’re banking on the current maximum saving of £15,000 and miss out.
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“That said, with nearly 50 percent of all homes purchased each year falling below a quarter of a million pounds, this still means that a lot of buyers will benefit if they do complete within the taper deadline, and with recent news from the Bank of England that the post-Covid economic recovery is stronger than anticipated, which is likely to provide more confidence to those considering a move, it’s reasonable to suggest that for the next few months at least, the UK housing market will stay busy.”
Jason Tebb, Chief Executive Officer of property search website OnTheMarket.com said the total number of completions last month still represents a “very busy market” and “contused momentum”.
Mr Webb said OnTheMarket.com had anticipated a decrease in transactions in April due to the fact a lot of people were hoping to complete their transactions before the original stamp duty holiday deadline of March 31.
He continued: “That said, the extension has now brought a new wave of buyers to the market who are, in many cases, still hopeful that they will squeeze in before the new deadline of the end of June, although this doesn’t appear to be the only driver anymore.
“Anecdotal feedback from our agents across the UK suggests that a combination of exceptionally low borrowing rates, particularly for those with more equity or higher deposits, and conversely, increased numbers of lower deposit products for those who are taking their first steps on the property ladder, are also key factors.
“With agents and conveyancers reporting that chains are getting longer, this supports the theory that there are second and third steppers who are being tempted to trade up, as they are currently able to achieve more than they had perhaps anticipated for their current property due to ongoing record low levels of properties available for sale, albeit of course that everything is relative and applies to their onward purchase.
“Having said that, looking forward, it’s quite possible to suggest that we may still see a similar spike in completion numbers in June, as those who are currently in the process of buying or selling race to get in before the stamp duty relief deadline.”
Similarly, Andrew Southern, Chairman of property developer Southern Grove, said he thinks the property market will continue to “boom”.
He said: “A spike in activity ahead of the original stamp duty deadline disguises what is still a strong performance as the housing market continues to benefit from a moving frenzy.
“That’s not only due to the extension of the tax break and still has much to do with a widespread and persistent hunger among homeowners to upsize.
“Sales volumes are still firing on all cylinders and beating historic averages by some margin though this staggering annual increase is mainly rooted in what happened last spring.
“The market had frozen over as the pandemic took hold and these figures reflect those dark times.
“People had to slam on the brakes as they waited to see how the pandemic unfolded.
“If a little more air is going to hiss out of the market, that’s unlikely to happen until the Chancellor’s giveaway wanes in the autumn.
“Any doomsayers predicting a crash will probably turn out to be wrong.
“The Government’s 95 percent first-time buyer loans have thrown the door open to those who would have otherwise struggled to afford their own home and this will continue to draw all-important newcomers into the market.
“As a result we may not see sales volumes fall any further over the summer.”
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