According to the data, UK residential transactions totalled 147,050 in February 2021 - a 48.5% rise against February 2020 and 23.0% higher than January 2021. When non-seasonally adjusted, transactions totalled 122,840, 48.3% higher than February 2020 and 26.4% higher than January 2021.
Richard Pike, Phoebus Software sales and marketing director, says: “As was expected the figures for February show the push to get transactions over the line before the original SDLT holiday deadline. However, the landscape changed again with the Budget and the market is likely to continue on its upward trajectory. With the mortgage guarantee scheme, higher LTV products, and lower rates, there is little to hold it back.
“However, despite furlough and other government schemes to help, for many the toll of the past year is still to be fully seen. Although FCA guidance is still asking lenders to continue to consider repossession as a last resort, once the ban is lifted, the likelihood of repossessions rising in the second half of 2021 is almost inevitable. Lenders will have to be on the ball and work with borrowers to minimise this risk.
“It’s exactly one year since the first national lockdown came into force and, now that over half of the adult population have had their first vaccination, we can at last look forward with a little more hope. Even if it is with a touch of trepidation.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Of course, it’s always transactions rather than more volatile house prices which provide a more reliable assessment of market strength. Although mostly reflecting transactions agreed several months previously, these figures demonstrate remarkable resilience of buyers and sellers determined to beat the stamp duty deadline.
"Since then of course the ‘holiday’ has been extended which has given many some breathing space to take advantage with confidence enhanced by an acceleration of the vaccination programme and better weather."
Anna Clare Harper, chief executive of asset manager SPI Capital, says: "HMRC's transactions data are important because these are key to prices and values in the housing market - affecting homeowners and investors of all scales. They give meaning to the more widely quoted house-price data since, for example, wild price rises based on a few local transactions should be interpreted differently to price rises based on a large number of transactions.
"Residential transactions in February were 48.5% higher than February 2020 and 23.0% higher than January 2021. This is an incredible increase and one that shows clearly the beneficial impact of having lower transaction taxes.
"The bigger picture is not entirely about stamp duty though. There have been four major drivers of transactions since the strictest lockdown conditions were removed in 2020: the temporary stamp duty reduction and cheap debt as a result of very low interest rates, which give buyers a pricing ‘discount’; the release of pent-up supply and demand and desire to improve surroundings among existing homeowners, which is a behavioural change; and the ‘flight to safety’, since in times of uncertainty, people want to put their money in an asset that feels safe and stable, with low volatility.
"At the same time, appetite from international buyers, an important source of demand, was restricted over the last year. Overseas investment was held back by travel restrictions and nerves around Brexit and Covid-19. The good news is we are now seeing the return of international buyer confidence, and this is reflected in the data. Many international buyers are looking to ‘lock in’ the current exchange rate, and their confidence in the UK is improving, which is anticipated to further boost transactions in key cities.
"The temporary stamp duty reduction has had a more than proportionate impact on transactions, shown in the February data, because buyers who use mortgages can take debt out on the property price, but they cannot use finance to fund transaction costs.
"It’s extension, and the smoother transition anticipated from ‘tapering down’ of this relief, is great news for buyers and sellers in the UK housing market as not having this transaction tax removes friction, encouraging transactions.
"Looking to the future, we expect continued growth in transactions over the coming months, boosted by the extension of the stamp duty reduction as well as growth in appetite from UK-based and international investors - from individuals through to institutional investors."