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The number of homes 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.
An estimated 180,690 transactions were recorded during the month, according to official figures from HMRC – double the total in March 2020 and the highest number since it started publishing the data in this way in 2005.
Separate data from the Office for National Statistics (ONS) suggested that this fevered activity has pushed up the cost of homes, with the UK average house up by 8.6% over the year to February.
This is the highest annual growth rate in the market since October 2014 and comes despite coronavirus lockdowns around the country restricting viewings and forcing lenders and solicitors to work from home.
Nicky Stevenson, the managing director at the national estate agent group Fine & Country, said: “The property market remains in a parallel universe at odds with the wider reality everyone has been living.
“It’s been a gloom-defying 12 months, given that last March, when the first lockdown arrived, the market seized up, mortgage products were withdrawn and everyone held their breath.”
The housing market has been fuelled by stamp duty cuts across the UK, which were brought in by governments to support the market after the initial lockdown. It was originally intended to end on 31 March.
In England and Northern Ireland, the level at which the tax kicks in was temporarily increased to £500,000, offering buyers a saving of up to £15,000. In Wales and Scotland, the threshold was temporarily increased to £250,000.
In the early months of this year, buyers scrambled to complete deals before the deadline, and today’s figures reflect those sales.
However, in the budget in early March, the chancellor announced he would extend the stamp duty holiday in England and Northern Ireland until the end of June, and then phase it out by moving the threshold to £250,000 for three months, before returning it to the original level of £125,000.
Further driving the market, and higher average house prices, has been a “race for space” among buyers who are prioritising larger homes and gardens in their house-hunting.
HMRC’s figures, which are not seasonally adjusted, show that transactions leapt by 49.6% over the month and that the 399,060 sales in the first quarter of the year made it the busiest quarter since the spring of 2006, when 419,270 homes changed hands.
The ONS figures put the average price of a home in the UK at £250,000 in February, an increase of £20,000 on the same month of last year.
In England, the average rose by 8.7% over the year to £268,000 (8.7%), in Wales by 8.4% to £180,000, in Scotland by 8% to £162,000 and in Northern Ireland by 5.3% to £148,000.
The north-west of England recorded the highest annual growth, with a 11.9% rise, and there were also double-digit increases in the east Midlands and Yorkshire and the Humber.
Meanwhile, London recorded the lowest growth of the English regions, with a 4.6% rise.
The ONS said its index showed a 9.1% increase in the average price of detached homes, while flats and maisonettes increased by 6.7% over the same period.
Andrew Montlake, the managing director of the mortgage broker Coreco, said the latest data was “yet more evidence of how the stamp duty holiday has turbocharged the property market”.
He said he expected the market to remain busy, with a government-backed 95% mortgage scheme launched on Monday supporting first-time buyers at the bottom of the chain.
“Structural forces will also support transaction levels in the short to medium-term, as the pandemic has triggered a deep rethink among homeowners about what they want from a property,” he said.
“The rules of the game have changed fundamentally and more people are finding themselves in properties that no longer suit their work lives.”
Source: The Guardian
Keyword: UK property sales at 16-year high as house prices soar | Housing market