Stamp duty holiday deadline sees residential property sales leap by 67% in September

The latest figures released by HMRC this morning have revealed that, in September, residential property transactions totalled 160,950 - a 68.4% rise against September 2020 and 67.5% higher than August.

Property Reporter
21st October 2021
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When non-seasonally adjusted, transactions were 165,720, 67.3% higher than September 2020 and 59.7% higher than August.

Anna Clare Harper, CEO of property consultancy SPI Capital, commented: "Housing transactions are important because they drive house prices, which both reflect and affect our confidence, and the economy.

"This boom in transactions - the highest level in over 10 years - is unsurprising. Investors, homeowners, solicitors and banks pushed hard to get transactions done before the end of September so that buyers could make the most of the final stage of the temporary stamp duty relief. This was combined with lockdown-led upsizing, a flight to safer assets and cheap finance due to long-term low-interest rates, all encouraging people to buy a home.

"So what next? Unlike in the stock market or cryptocurrencies, where Bitcoin has just reached a new high too, people don’t tend to sell at a lower price than they paid unless they really need to. Many homeowners are fixing their rates now, since interest rates (and therefore mortgage repayments) are low, and expected to remain so. This makes a mass sell-off from property owners seems unlikely.

"As a result, although it’s expected that transactions slow over the next year, prices are not expected to fall."

Peter Beaumont, CEO of The Mortgage Lender, said: “With demand outstripping supply, a fierce competition is keeping the fire burning in the housing market. Buyers are scrabbling to make the most of record-low mortgage rates, seizing a window of opportunity before they may disappear off the market. What’s more, with hybrid working establishing itself as a fixture of post-pandemic working life, the race for space rolls on.

“But with the furlough scheme ending last month, October could see some of the steam come out of the market. Coupled with the anticipation that the Bank of England may raise interest rates before the end of the year, it could soon be a less attractive time for buyers to get on the housing ladder. Locking in a fixed-rate mortgage now is certainly the goal for many buyers, but in the longer term, we need to see more flexible affordable mortgage options. Lending ought to be for real life, which won’t always correspond to trends in the market.”

John Phillips, national operations director at Just Mortgages, said: “As the UK housing market steadily edges closer to normality, property transactions are returning to familiar levels.

“There is no doubt that despite demand still desperately outweighing supply, the desire to move has not wilted for prospective buyers. Particularly those looking for larger homes as hybrid working models are adopted widely across the country and people seek office space at home. Buyers who find themselves in frenzied waters right now are – rightly so – making the most of low borrowing rates.

“As we look forward to the rest of 2021, it is safe to say that the number of buyers is not set to drop as people race to buy property before we see possible increases in interest rates.”

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