The momentum in the housing market that usually builds after the summer lull has escalated rapidly this year, caused by the approaching deadline of the stamp duty holiday and resulting in a record number of buyers.
The average number of house hunters registered per estate agent branch increased by 33pc, from 396 in August to 525 in September, according to the latest data and research from the National Association of Estate Agents (NAEA) Propertymark. Such numbers have not been seen since June 2004, when 581 buyers were recorded per branch.
The data show that on average 14 sales were agreed per branch in September, the most recorded since August 2006. 19pc of house purchases were made by first-time buyers in September, the lowest recorded since March 2013, when the figure also happened to be 19pc, a drop from 23pc in August 2019 and 30pc in September the same year.
The 14 agreed sales per branch is the highest figure recorded since August 2006 and represents an increase of 2, up from 12 in August. The number of sales per branch has also risen year on year by three-quarters, jumping from 8 in September 2019.
The average number of properties available for sale per branch stood at 41 in September, a fractional increase from 40 in August.
8pc of properties in September sold for more than the original asking price, a fall from a high in August when 13pc of properties sold for more than the asking price. A majority (53pc) of properties sold for less than the asking price in September.
‘Cliff edge’ problem could damage housing market
Mark Hayward, CEO of NAEA Propertymark, commented that buyers and sellers tend to flood the housing market in September in the hope of completing their transactions ahead of the festive period. However, the pressure to complete sales before the stamp duty holiday deadline has resulted in a large spike in buyers and sellers coming to the market.
With an average of 13 buyers for every available property, he continued, the boom has been hugely beneficial for the housing market. But with a stamp duty cliff edge occurring on March 31, the association is calling on government to rethink this deadline due to the increased pressure on service providers which is causing delays for buyers and sellers.
Whether the solution is a tapering-off or an extension, Mr Hayward added, failure to find an answer to the cliff edge problem could cause thousands of sales to fail at the last minute and have a drastic, knock-on effect on the housing market which so far has recovered well from the coronavirus-induced slump.
Currently, it takes just over 100 days from sales agreed to completion, but the volume of business is such that this could increase in the short term. Ideally, a sale should be agreed before Christmas and the property search should begin well in advance for those keen to beat the deadline in March.
50pc more transactions in pipeline
A total of 418,000 properties worth £112bn are passing through, according to data from Zoopla which show that the sales pipeline has risen by 50pc on last year.
With an additional 140,000 transactions in the purchasing pipeline compared to the same period last year, the recovery in the post-lockdown market has led to record high numbers of sales agreed. The surge in activity results from a substantial uplift in demand following the extended market closure during lockdown.
Between July and October, sales agreed rose by 40pc to 60pc compared to the same period in 2019. Zoopla’s data also reveal that new sales agreed jumped 9pc year on year in June, increasing to 42pc in July and peaking at 62pc in August. These sales are now in the transaction pipeline, moving towards completion.