The release of the HMRC monthly property transactions data for September yesterday, which shows a 21.3% monthly increase in residential sales, reflects the growth in demand that agents have been reporting over the past few months, thanks in part to the stamp duty holiday.
With purchasers rushing to take advantage of the tax saving, there appears to further room for growth when it comes to property transactions.
Nick Leeming, chairman of Jackson-Stops, commented: “The data from the HMRC paints a positive picture of how the stamp duty holiday announced in July has helped the property market sustain strong levels of activity in what could have been a rather uncertain time for the industry.
“The perfect blend of pent-up demand, the need for change and significant stamp duty savings has resulted in a strong uptick in activity with over 98,000 residential transactions recorded in September.
“The property market has been on a clear upward trajectory since the housing market lockdown ended in May, with residential transactions up 21.3% in comparison to the month prior and lagging only 0.7% behind that recorded this time last year. This annual decrease is only to be expected but we do anticipate October’s figures to show the gap continuing to close as agents’ pipelines continue to convert in the lead up to the New Year.
“On the ground, our offices echo the positive figures, with accepted offers, sales and new listings all up month on month across the Jackson-Stops Group.”
The upward trajectory in transactions means that “it is a fantastic time to be a mortgage broker”, according to John Phillips, national operations director, Just Mortgages and Spicerhaart.
He said: “What we’re seeing at Just Mortgages is reflecting the national figures. In fact, we saw record numbers of applications and exchanges in September. Numbers are higher than any of us expected to see and volume is consistently high across the country, surprisingly the South East and London are slightly quieter.
“The one downside has been the lack of lenders offering high LTV [loan-to-value] mortgages. There are still thousands of clients with 10% deposits who are safe investments and they are currently being blocked from owning a home.
“The market needs a steady supply of these products to support current applicants. Brokers are not concerned about service level agreements being stretched, delivering for the client is more important, timing is not the issue. If lenders can fix that, we expect the demand to continue for the rest of 2020.”
It is also a good time to be a property developer right now, with new build homes proving popular with many purchasers.
Andrew Southern, chairman of property developer Southern Grove, commented: “Homes are flying off the shelf and this trend still looks like it has further to run. If true, it will have taken a pandemic to shift transactions up a gear and the irony won’t be lost on the industry. However, this doesn’t have to be a flash in the pan.
“This current expansion of activity is not all down to financial incentives and the government needs to find ways of sustaining this increase in sales beyond the New Year when the March deadline for the end of the stamp duty holiday will be staring buyers down. There is already talk of some missing out because of severe delays to the conveyancing process tripping up even those who have had offers accepted and are trying to exchange now.
“If sales do slow it won’t be due to a lack of demand. The UK’s property story has always traced the path of a market that has occasionally waned despite ferocious demand. The fundamentals tell you the UK market should always be busier than it has been during the past decade.
“Housebuilders want to see the government recognising it has an opportunity to keep this momentum going, and reforming stamp duty would be a good place to start. The financial burden doesn’t necessarily have to be reduced but it does need to be altered so it is levied over a period of time. Now would be the perfect moment to realise the largest possible dividend from a change of this kind.”