Posted in June 2021
In May 2021, according to seasonally adjusted transaction data from the Office for National Statistics - 114,940 properties changed hands. This is a strong result, despite falling slightly by 3.9% from April 2021.
This is 138.2% more than the transaction count in May 2020, when the market was still recovering from the global Covid-19 pandemic.
Sales transactions are expected to spike again during the month of June, owing to the stamp duty holiday deadline at the end of the month.
The previous peak was March 2021, when the stamp duty relief was initially due to end on 30th March, with 173,920 property sales completing that month.
Personal Finance Analyst at Hargreaves Lansdown, Sarah Coles said: “The stamp duty holiday frenzy is gradually calming down, rather than heading hell for leather over a cliff edge.
“However, the stress of buying in such a busy market, especially one where the deadline shifts overnight, could mean that when it tapers in July, buyers and sellers are poised to throw in the towel.
“The drop in sales in May isn’t a huge surprise: we tend to see this pattern when a tax change distorts the market. Although the stamp duty holiday deadline was postponed to the end of June, it wasn’t announced until the beginning of March.
“It usually takes just over three months to go from agreeing a sale to completing on it, so there’s a good chance that most of these sales would have been agreed in February, when buyers assumed they would be paying stamp duty in full.
“The deadline extension is likely to mean a bumper June, as buyers seized the brief window of opportunity to get a tax-free purchase.”
She added: “The fact that we saw a relatively gentle fall, rather than a cliff edge in May, could indicate that when the stamp duty holiday finally tapers to an end, we’ll avoid vertiginous drops. However, there’s also the risk that buyers and sellers are at the end of their tether.
“Anyone trying to get a sale over the line at the moment is likely to have lived through upheaval and uncertainty for months, along with delays from an overloaded system.”
However, there is more positive news about the sales market after July from elsewhere within the property industry.
Managing Director of Property Finance at Shawbrook Bank, John Eastgate said: “Another bumper month for property sales as the stamp duty holiday continues to fuel the market.
“Buyers who have managed to get their deal across the line will be breathing a sigh of relief that they’ve got in before the deadline for the holiday to end.
“Yet, it’s unlikely that we’ll see sales fall off the much prophesied cliff edge next month. The market remains buoyant and buyers confident in the deals that they can achieve.
“As a decision to raise the base rate by the Bank of England looks to become more likely, it’s possible we’ll see buyers try to secure favourable rates ahead of any increase.”
Chief Commercial Officer at Gatehouse Bank, Paul Stockwell said: “Transactions still exceed pre-pandemic levels, and this will likely remain the case for some time as there are still a significant number of sales in the pipeline.
“Even with the withdrawal of most of the stamp duty savings at the end of this month, mortgage approvals are still soaring almost 20% above pre-pandemic levels, indicating that buyers are undeterred from their ambitions of buying a new home.
“The only thing which could dent transactions now is a lack of supply, but even this could bounce back soon as some people will have been too nervous to market their property during the pandemic, and others will have been waiting for the stamp duty rush to calm down to avoid the conveyancing bottleneck.”
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