The latest Residential Transactions report was released by HMRC this morning and contains details of the numbers of completed property sales in June. On a seasonally adjusted basis, the total number of homes sold in the UK last month was 63,25 which reflects a 31.7 percent increase on the number of property deals completed in May. However, this was 35.9 percent lower than in June 2019, when 98,670 homes were sold.
Taken at face value, these figures show that a housing market recovery was well underway before the Stamp Duty Holiday in England was announced on 8th July.
It’s also worth remembering that Scotland and Wales were still subject to lockdown measures until the latter end of June, meaning that the majority of completed transactions reported for last month were in England alone.
This would suggest there is likely to be another significant jump in transaction figures reported for July when the data is released in August.
Tomer Aboody, director of property lender MT Finance, said of today’s report: “These numbers demonstrate the most abrupt halt to the property market we have ever seen due to lockdown, followed by a significant surge in interest from people wanting to buy.
“We are still below last year’s numbers, which in turn were down on the previous year, but confidence is creeping back up.”
Tomer continued: “The stamp duty holiday has played a big part and there is a lot of activity around.
“The market has been crying out for a stamp duty reduction for some years and although it’s not across the board, it has fuelled demand and encouraged buyers to come back out and transact.”
Echoing the perceptible increase in activity is Peter Ambrose, Managing Director of property law firm The Partnership, who observed: “It’s no surprise that the number of sales that have been reported this June are down on last year.
“Obviously closing the property market in March had a huge impact on transactions completing, as it usually takes about three months for deals to go through.
“However, in London and the South East we have been truly amazed by the response from the releasing of the market and have never been busier.”
Peter added: “When we look at the number of new client instructions now when compared to the same time last year, they are up by 70 percent which is remarkable.
“The stamp duty holiday that was introduced a few weeks ago has meant that the number of new instructions have increased even further. The numbers continue to go in only one direction which is upwards, and we are really positive about the rest of the summer.”
Guy Gittins, managing director of London estate agency chain Chestertons also reported: “June was an incredibly busy month for all of our offices as we dealt with record levels of new buyers coming to us wanting to move quickly.”
Guy went on to suggest there was: “A noticeable difference in buyers’ attitudes in June, with many realising that prices probably aren’t falling any further and that there aren’t too many properties on the market, so they have to make sensible offers and act quickly.”
But it’s not just the capital that is experiencing a surge in demand. James Forrester, Managing Director of Birmingham estate agents Barrows and Forrester observed: “The market here in the West Midlands has moved on significantly since the doldrums of lockdown with a huge uplift in enquiries and viewings.
“Add in the boost of the stamp duty holiday where the average Birmingham buyer will save around £2000 and the scene is set for growth in both transactions and prices across the region.”
With the average time to sell currently at approximately 12 weeks from the time an offer is accepted – longer if the transaction involves a chain – we probably won’t see the effect of the stamp duty holiday schemes reflected in completion figures until October at the earliest, when data for September will be available.
Although the resurgent positivity is very welcome, in reality the housing market isn’t out of the woods just yet, as the spectre of rising unemployment continues to grow.
Access to mortgage borrowing is another key factor, with the current shortage of low deposit products creating a barrier to entry for many first time buyers, albeit that lenders are gradually beginning to return to this particular sector.
Only time will tell if the current level of positive sentiment can create enough momentum to stave off a significant correction in the months to come, or if this is just a temporary reprieve.
Follow Louisa on Twitter: @louisafletcher