There was no sign of the usual traditional slowdown in the UK property market at the end of last year. Instead, December followed suit with the rest of the year, bucking trends and ripping up the rule-book to end in a blaze of activity.
The latest data released this morning from HMRC shows the extent of this, revealing that residential property transactions totalled 129,400 during the month, 31.5% higher than December 2019 and 13.1% higher than November.
On a non-seasonally adjusted basis, the number of transactions rises to 137,200, 34.2% higher than December 2019 and 14.0% higher than November 2020.
Anna Clare Harper, chief executive of asset manager SPI Capital, says: "The increase in residential property transactions - 34.2% higher than December 2019 and 14.0% higher than November 2020 - is good news for the property market.
"Residential transactions in December 2020 were at their highest level for that month in a decade, although year-to-date figures are at a 9-year low. This was due to strict lockdown in April and May, where transactions were down by about 50% compared with the same time the previous year, and they grew only incrementally throughout 2020.
"These figures represent recovery rather than boom. Right now, property transactions are being encouraged by the temporary Stamp Duty reduction. We are also seeing the release of pent-up demand and supply from earlier in the year when it was very difficult to buy to sell a property. Transactions have been dominated by second-time buyers, typically trading up to improve their surroundings, rather than first-time buyers ‘getting a foot on the ladder’.
"We’ve seen a spike in enquiries from commercial property investors keen to invest in the residential sector, in pursuit of lower volatility. As a result, over the next decade, we expect continued growth in residential property prices, although the pace of growth will slow down when the temporary SDLT reduction ends. However, the volume of transactions may not increase, since many investors coming into the residential market are of a larger scale. These investors will be buying bigger deals: blocks of flats on a single title, rather than individual flats on separate titles. This will show up as fewer individual transactions."
Sam Mitchell, CEO of online estate agent Strike, said: “2020 taught us to expect the unexpected, and that definitely rings true for the UK property market. Bucking any signs of the usual seasonal slowdown over the Christmas period, December was instead the busiest month on record for property transactions in over 10 years.
“Although we saw tighter lockdown restrictions come into place again, the property market remained open for business and our agents were kept busier than ever. The looming stamp duty holiday deadline, partnered with the vaccine rollout, both played their part in boosting market activity and increasing consumer confidence as the year came to a close.
“Going into 2021, all eyes are on the property market to see how it fairs when the stamp duty holiday draws to a close in March. Truth be told, we are seeing enough buyer and seller demand to keep things moving well beyond that deadline. We may be faced with broader economic changes in the year ahead, but history would suggest the housing market will be resilient enough to fight back.”