House sales begin to recover as lockdown measures ease
UK property transactions grew almost a third in the month to June as lockdown measures began to lift around the country, but remain 35 per cent down since last year as market uncertainty and the Brexit deadline continue to weigh on buyer sentiment.
Around 63,250 residential property transactions took place in June, up 31.7 per cent since May, as prospective buyers were allowed to attend property viewings for the first time in months.
Chancellor Rishi Sunak’s decision earlier this month to increase the nil rate band for residential stamp duty from £125,000 to £500,000 will likely cause a further spike in the rate of house sales, as buyer confidence begins to return to pre-Covid levels.
However, June property sales figures were still 35.9 per cent lower than the same period last year, as buyers remained tentative during the pandemic, while the Brexit transition period looms ahead.
The figure marks the lowest sales rate in 10 years, marking a stark drop from June 2017’s peak of almost 120,000 monthly house sales, and below the 75,000 property sales seen in June 2011.
Provisional residential transactions for the quarter to April 2020 were the lowest on record, beating the housing sale slump in the wake of the financial crisis.
However, market pickups in December 2009 and March 2016 following stamp duty holidays suggests that the low rate may only be temporary as buyer confidence remains knocked in the immediate aftermath of the pandemic.
Tomer Aboody, director of property lender MT Finance, said: “These numbers demonstrate the most abrupt halt to the property market we have ever seen due to lockdown, followed by a significant surge in interest from people wanting to buy.
“The stamp duty holiday has played a big part and there is a lot of confidence around. The market has been crying out for a stamp duty reduction for some years and although it’s not across the board, it has fuelled demand and encouraged buyers to come back out and transact.”
Aboody added: “For now, confidence and transaction numbers are increasing, demonstrating a welcome positivity which we have not seen for some time.”
Provisional estimates for non-residential property transactions in the UK showed a 31.2 per cent increase from May to June, as businesses swooped on market volatility to boost their bricks-and-mortar portfolio.
New provisional figures from the HM Revenue & Customs (HMRC) showed there were 7,340 non-residential property transac- tions in June, down 27.4 per cent year-on-year.
Andrew Southern, Chairman of property developer Southern Grove, said: “The annual decline isn’t particularly flattering but it’s the trajectory that’s most important. The next few months are going to make June look like an amuse-bouche rather than an entrée.
“A healthy improvement in volumes month on month points to a large proportion of agreed sales that were knocked back due to the pandemic finally reaching completion. However, those who only began seriously looking in late May won’t necessarily feature in these figures for months yet.”