House sales in the UK reached a record high in March as buyers and sellers sought to complete property transactions before the end of the stamp duty holiday.
According to official figures from HMRC, around 180,690 deals were recorded during the month, double the total in March 2020 and the highest number since the government department began publishing data in this way in 2005. The average UK house price rose by 8.6pc over the year to February, as separate data from the Office for National Statistics (ONS) suggest that the frenetic activity has pushed up the cost of homes.
The statistics represent the highest annual growth rate in the market since October 2014 which occurs in spite of the coronavirus lockdowns across the country that have restricted viewings and forced lenders and solicitors to work from home.
Nicky Stevenson, MD at national estate agent group Fine and Country, believes the property market exists in a ‘parallel universe’ at odds with the wider reality everyone has been experiencing. The last 12 months have defied doom and gloom, she says, given that when the first lockdown arrived last March, the market ground to a standstill, mortgage products were withdrawn and everyone held their breath.
North West records highest annual growth
Without doubt, the housing market has been driven by stamp duty cuts across the UK, which were brought in to support the market after the initial lockdown and were originally intended to end on 31 March but have been extended until 31 July.
The week’s figures reflect the sales fuelled by buyers rushing to complete property deals in the early months of this year ahead of the deadline. Additionally, the ‘race for space’ among buyers, who seek larger homes and gardens when house-hunting, has helped to drive the market and resulted in higher average house prices.
HMRC’s data, although not seasonally adjusted, show that transactions surged by 49.6pc 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 place the average price of a home in the UK at £250,000 in February, an increase of £20,000 on the same month last year. The average in England rose by 8.7pc over the year to £268,000, in Wales by 8.4pc to £180,000, in Scotland by 8pc to £162,000 and in Northern Ireland by 5.3pc to £148,000.
Although there were double-digit increases in the East Midlands and Yorkshire and the Humber, the North West of England reported the highest annual growth with an 11.9pc jump. London recorded the lowest growth of the English regions, with a 4.6pc rise.
The ONS said its index showed a 9.1pc increase in the average price of detached homes, while the price of flats and maisonettes rose by 6.7pc over the same period.
Property forecast to power ahead
Andrew Montlake, MD of mortgage broker Coreco, thinks the latest figures are ‘yet more evidence of how the stamp duty holiday has turbocharged the market’. He expects the market to remain busy, buoyed by a government-backed 95pc mortgage scheme launched on Monday supporting first-time buyers at the bottom of the chain.
Structural changes, he says, will also shore up transaction levels in the short to medium-term, as the pandemic has triggered a profound rethink among home owners as to what they want from a property. More people are finding themselves in properties that no longer suit their lifestyles, due to fundamental changes in the work-life balance.
Jonathan Hopper, CEO of Garrington Property Finders, says the financial benefit to buyers of the stamp duty holiday ‘has been all but wiped out by rising prices’ but remains a powerful motivator for people to make a move. Greater choice and increasing consumer confidence, he adds, look set to drive a second wave in buyer appetite, as lockdown restrictions ease and more homes come on to the market.