As 217.1% more people sell in June compared to the 10-year average.
June 2021 was the busiest month ever for UK estate agents, home removal companies, and conveyancers since monthly records began, as HMRC logged 213,120 residential transactions in June, a jump of more than 216% nationally on the same month last year (when the housing market had just reopened after the initial lockdown).
The cause of this was all the homebuyers trying to complete their property purchases before the approaching Stamp Duty Holiday deadline finished at the end of June. This was important as house buyers had until 30th June to complete their sale to save up to £15,000 in Stamp Duty Tax.
Many property market commentators believed the property market would slump after the Stamp Duty Holiday finished. Yet, we haven’t observed many property sales falling through or renegotiations because the buyer had to pay the extra Stamp Duty, and talking to other property professionals around the UK, neither have they.
Let’s not forget that the Stamp Duty Holiday isn’t totally over as it is tapering off until 30th September. This means homes and apartments sold under £250,000 will still profit from the Stamp Duty Holiday.
The best month ever before this June was March 2016, when there was a rush by buy-to-let landlords to secure a property before the introduction of a 3% Stamp Duty surcharge for second homes.
So, what has driven this? The Stamp Duty changes caused some people to bring their home moves forward from 2022/3 to take advantage of the tax savings. Yet the most significant thing, talking to many homebuyers and sellers, is the pandemic has changed the way people live. Working from home and needing additional office space has meant many families (and others from out of the area) are seeking larger properties with more extensive gardens and better access to the countryside. We really can’t see this social trend changing for a long time. We believe this means property prices in the medium term will not be markedly different over the next couple of years yet…
Don’t be alarmed to see volatile short-term changes in the run-up to Christmas (both up and down) with house prices.
We have always been a believer in the medium-term (i.e. over a couple of years) house price trends instead of the monthly trends, which can sometimes be like a yo-yo. We have always said the best bellwether to the property market’s health is the number of property transactions rather than the house prices.
Finally, we can only see this continuing as Banks scrabble to give money away in the form of cheap mortgages. A few weeks HSBC and TSB launched a 0.94% two-year fixed rate deal for those wishing to borrow 60% or less. More recently, the Nationwide Building Society launched a 0.99% five-year fixed-rate mortgage deal (again on a maximum of 60% loan to value basis).
If you would like a chat about the property market, your options and where you stand in the property market – please do not hesitate to give us a call.