The stamp duty holiday has ‘turbocharged the property market’

Buyers and sellers last month were in rush to complete deals before end of stamp duty holiday and that has driven property prices higher, the latest figures show.

The number of residential properties sold in the UK hit a record high in March as buyers and sellers attempted to complete deals before the end of the stamp duty holiday.

According to official data from HMRC, there were a record-high 180,690 transactions recorded during the month, which is double the total in March last year.

Separate figures from the Office for National Statistics (ONS) shows that high demand is placing upward pressure on property values, with the UK average house price increasing by 8.6% over the year to February.

Andy Sommerville, director at Search Acumen, said: “This data comes as no surprise. The stamp duty holiday has once again turbo charged the property market – but not necessarily for the better.

“The sharp rise in monthly residential property transactions has been triggered by homebuyers who put transactions on ice until they knew whether the holiday would be extended picking up where they left off.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The extension of the stamp duty holiday has continued to fuel the increase in house prices, while the government’s mortgage guarantee scheme will push demand higher as it attracts first-time buyers back to the market.”

Andrew Montlake, the managing director of the mortgage broker Coreco, concurred the latest data was “yet more evidence of how the stamp duty holiday has turbocharged the property market”.

The founder and CEO of GetAgent.co.uk, Colby Short, said: “The market remains in a very strong position despite monthly price growth sitting still and this was no doubt down to two factors. The first being the continued difficulties in securing a buyer caused by lockdown restrictions and the second being a drop in momentum on the run-up to what would have been the stamp duty holiday deadline.”

James Forrester, managing director of Barrows and Forrester, commented: “Many will be quick to panic at the sight of a month-on-month price growth stall but this simply doesn’t portray the overall health of the market, in the same way our efforts in combatting Covid can’t be assessed on such a short-term basis.

“The long-term picture shows a market in very good health, driven by strong regional performances across the board, from the South West, the East Midlands, Yorkshire and the Humber and the North West. As we enter what is often the busiest time of year, we can expect the market temperature to rise and house prices to follow suit for the remainder of the year, at the least.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These ONS figures are the most comprehensive available, albeit a little historic, but do confirm the solid growth in prices we saw last month.”

He added: “Despite strong growth in house prices already, we are confident that there is enough demand to ensure there will not be a price correction, despite the tapering of the stamp duty holiday from the end of June.

“Our view is reinforced by the rollout of the vaccine and easing of lockdown restrictions which is boosting confidence in the economy and easing fears of a spike in unemployment when the furlough scheme is due to close on 30 September.”

Reapit
x

Email the story to a friend

5 Comments

  1. Hillofwad71

    Well  rollback the years to 1988  with London  house prices up a staggering 50% ,the frothy  market stretching  outward throughout the country.
     
    Lawson In his  April budget announced that the double tax relief on mortgages  for  unmarried couples will end .The date set for  August.This gave the pot another stir as demand soared to beat the headline
     
    The result post August  a 20% decline in  prices by 1990 and a whole raft of homebuyers left in negative equity
     
    Lawson later publicly expressed bitter regret at not having implemented the change with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline fuelled the sharp increase        

    Report
  2. scruffy

    My concern at such a headline is that the media will assume that the Stamp Duty holiday is the only reason for the current buoyancy and will report its ending with dire warnings about the future direction of the market.
    For my agency, the pandemic has created a significant new demand from those whose working practices have changed. There is more confidence from discretionary purchasers, such as second home and retirement buyers, and with low interest rates seemingly set to stay for a while, and even investment purchasers have been seen.
    As an industry I believe we should spread the word that while the Stamp Duty holiday undoubtedly coincided with a resurgence in the housing market, but it has been one of several factors driving demand.
    We can and will survive without such temporary stimuli, but in my view, the strategic shift in demand from a range of target markets has got a good way to go yet.

    Report
  3. WatchingwithInterest

    I don’t think stamp duty is the driving factor. Just the most visible.

    Report
  4. mattfaizey

    Won’t last…..We had a ‘store’ of @900k transactions that were put on hold during the Brexit malaise. Of which @150-200 were serviced jan-feb 2020.Plus @another 250k from over the March to April lockdown weeks.We came back @May 18th last year to an avalanche which is still rumbling.But, we’ve seen @50-70k transactions per month higher than average normal conditions (if there ever is such a thing).Much activity over this is NOT natural economic growth. It is transactions and decisions brought forward from late this year and next. Possibly anywhere from 25-50% of purchases/sales from late 21 and 2022 maybe even 2023 have come forward due to stamp.Personally I think that in the quarter out to Sept we will run out of both the ‘store’ and indeed the leveraged transactions from the future.Frankly I suspect Oct/Nov we will in comparative terms see tumbleweed blowing through.I haven’t even mentioned affordability. Or rather that currently with every passhing day homes become more out of reachThe public aren’t stupid. Even if/when it isn’t conscious.They do reach a point where they’ll sit tight when they fail to see value. When property increases are 5 times earnings increases, and with no logical ‘boom’ in GDP from ‘normal’ causes to be seen nor expected…….I expect in 12months it’ll feel quite different

    Report
  5. padymagic

    Hillofwad71 : history to repeat itself?

    Come back to this story in September

    Report
X

You must be logged in to report this comment!

Comments are closed.

More top news stories

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.