UK property sales at 16-year high as house prices soar
Buyers and sellers in March were in rush to complete deals before end of stamp duty holiday
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.
About 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 the fevered activity had pushed up the cost of homes. The UK average house price rose 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12 months, given that last March, when the first lockdown arrived, the market seized up, mortgage products were withdrawn and everyone held their breath.”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 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.
Buyers scrambled to complete deals in the early months of this year before the deadline, and today’s figures reflect those sales.
The chancellor, Rishi Sunak, announced in the budget in March that 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.
A “race for space” among buyers who are prioritising larger homes and gardens in their house-hunting has also helped to drive the market and higher average house prices.
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.
The average in England rose by 8.7% over the year to £268,000, 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 an 11.9% rise, and there were also double-digit increases in the east Midlands and Yorkshire and the Humber.
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. 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.”
Jonathan Hopper, the CEO of Garrington Property Finders, said the monetary benefit to buyers of the stamp duty holiday “has now been all but cancelled out by rising prices”, and was set to be cut from July.
“But despite this it remains a powerful catalyst, convincing countless would-be buyers that the time has come to move,” he said. “As lockdown restrictions ease and more homes come on to the market, greater choice and rising consumer confidence look set to drive a second surge in buyer appetite.”
Case study: ‘Homes sell within days’
Alex and Georgina Linnell have been looking for a new home in Devon since last summer. They sold their home in November and are living in a static caravan while they try to buy.
“The supply has been really restricted,” Alex said. “Things come on to the market but then they sell within days. We did a drive-by of a property last Sunday – it went on the market on the Friday and we phoned up on the Saturday to arrange an appointment. We had a call at about 10am on the Monday to say they’d had an offer.”
And it is everything that is selling. “It used to be that most people prepared their houses, ran a Hoover around, before they put it on the market – now they are just not bothering, and the houses still sell,” he said.
The couple, who have a budget of about £700,000 and are willing to live anywhere across a wide stretch of the county, said that the restrictions on viewings last year slowed their search. “It was very difficult to get in to see places last summer,” Alex said. “Because we weren’t sold subject to contract they were very reluctant to let us in.”
Once they had an offer on their home, they expected things to improve. And they went through with the sale, completing in early March, thinking that they would be better placed as cash buyers. Yet, they are still in a queue of people to look around anything that comes on while prices keep rising.
“I don’t think the stamp duty extension helped us,” Alex said. “It probably got people in to look at our house but it hasn’t done anything for us. People have just added it to the price.”