Residential property transactions are unsurprisingly higher as a consequence of the pent-up demand from purchasers, caused in part by the stamp duty holiday, the latest data from HM Revenue & Customs shows.
The headline figures reveal that the provisional seasonally adjusted estimate of residential transactions in the UK last month is 129,400, up 31.5% compared with the corresponding month in 2019, and 13.1% higher than November 2020.
Nick Leeming, chairman of Jackson-Stops, commented: “Despite the month of December being a traditionally quieter period of time in the housing market, the last month of 2020 saw significant activity, with transactions up by almost a third year on year and by more than 13% month on month. Indeed, our own business data supports this, showing that completions across our national network rose 71% in November compared to the three months prior.
“While the government’s stamp duty holiday has offered a strong incentive for buyers to transact in the middle and lower ends of the market, it is not the only force driving the surge in transactions seen in Q4 2020.”
Sam Mitchell, CEO of online estate agent Strike, concurred: “The looming stamp duty holiday deadline, partnered with the vaccine rollout, both played their part in boosting market activity and increasing consumer confidence as the year came to a close.”
But the number of homes sold in the year as a whole was 1.04m, which is down 11.5% from the 1.18m in 2019.
“The trajectory looks good on paper but, due to the first lockdown, the UK still registered a 11.5% fall in residential sales last year, falling 135,200 to 1,041,610 on a seasonally adjusted basis,” said Andrew Southern, chairman of developer Southern Grove.
“With the stamp duty holiday in full swing, that’s going to put a dent in the exchequer,” he added. “The chancellor will no doubt be hoping that a continued sales boom can help fill the hole in the taxman’s revenues but he’s got an impossible decision to make over whether to extend the stamp duty holiday or phase it out.”
Nevertheless, last month was the first time since 2015 that December transactions topped the 100,00 mark.
Andrew Montlake, managing director at Coreco, said: “The increase of nearly a third on the previous year is all the more impressive given that a lot of people in the latter stages of 2019 were keen to get into a new home before the Brexit endgame and the uncertainty that might entail.
“The worry now is of a collapse in property transactions from April onwards when the stamp duty holiday ends, although overall levels are likely to be roughly the same as in 2020.”
A number of people, including agents, mortgage brokers, buyers and sellers, are hoping that the chancellor bows to pressure and extends the stamp duty holiday deadline.
“But for now, activity levels in the property and mortgage market are nothing short of frantic,” Montlake added.