Yahoo Finance UK hits record number of homes sold in a month
The number of homes changing hands in the UK rose to the highest level on record in June, with 213,120 sales registered with HMRC.
The flurry of activity before changes to stamp duty rules in England, Wales and Northern Ireland made for the busiest month since the figures were first published in April 2005, during the housing boom that led up to the financial crash.
HMRC said the figures “captured significant impacts from forestalling activity by taxpayers”, with buyers bringing forward transactions to take advantage of government policy.
The figure, which is not seasonally adjusted and is based on estimates, was above 200,000 for the first time ever.
Added to the previous two months’ figures, it showed the first quarter of the new financial year was the busiest since the third quarter of 2007, with a total of 428,620 registered sales.
The introduction of stamp duty holidays across the UK in July last year came as the housing market was already picking up post the original lockdown.
In England and Northern Ireland the tax was scrapped on the first £500,000 of a purchase, while in Scotland and Wales the threshold was moved to £250,000.
An extension from the original deadline of 31 March, except in Scotland, meant buyers had until the end of June to take advantage of the full break. In England and Northern Ireland it will be phased out entirely at the end of September.
Paul Stockwell, chief commercial officer at Gatehouse Bank, said June’s record was likely to stand for a long time as it reflected “a perfect storm of demand, driven by lockeddown buyers seeking more space, and the introduction of significant tax savings”.
However, commentators said they did not expect the market to slow down entirely.
Mortgage rates are at record lows, with the UK’s largest building society, Nationwide, today launching the first sub-1% five-year fixed-rate deal, and there still appear to be buyers looking to move to larger homes.
Iain McKenzie, the chief executive of the Guild of Property Professionals, said: “Much of last month’s rise is due to the last-minute scramble to make the most of the stamp duty holiday, but the holiday hasn’t fully wound down yet and we could still see a boom in areas with housing priced under £250,000.”
He added: “Demand for houses still exceeds supply by a huge margin, with our estate agent members seeing some of the fewest properties available per branch in living memory.
“With such a scarcity of housing stock, and the continuing lower level of stamp duty holiday, there is no sign of prices slowing down any time soon.”
The housing boom was also evident at the top of the property market, with people buying more £5m+ homes in London in the first half of the year than they have since 2014.
Data from Savills estate agent showed that there were 237 sales worth more than £5m recorded in the first six months of 2021, 59% more than the first half of 2020, when sales were depressed by the first lockdown, and 61% higher than the same period in 2019.
The total value of the transactions was £2.3bn, 41% higher than the first half of 2020. It was the highest number and value of transactions since the rush to beat previous stamp duty changes seven years ago.
Domestic buyers and international buyers already living in London drove the sales, Savills said, with many looking for larger homes and gardens to enjoy more space after the lockdowns. Activity was particularly focused in the £5-10m price range, which recorded 179 transactions, 72% more than the 104 sales last year.
Sales over £10m were roughly equal to the first half of 2019. Houses of that value are often bought by overseas buyers, who may not have been able to travel to the UK.
“The absence of overseas buyers has held back the recovery of parts of the prime London market, most notably the highest value central postcodes, where prices remain around 20% below peak,” said Frances Clacy, a Savills residential research analyst.
“Houses have remained the top performers as buyers look to upsize, but the flat market continues to lag behind because of international travel restrictions. However, pent-up demand from those who have been unable to travel suggests that there is likely to be a rebalancing in demand once international buyers are able to visit the capital again.”
