Experts Comment On Property Transaction Surge And Market Conditions

The latest figures from HMRC of UK Property Transactions Statistics revealed a significant surge in property transactions in July, most probably due to pent up demand following Covid-19 lockdown.

According to the latest update, the number of residential property transactions rose by 14.5 per cent between June and July to 70,710, although as a comparison the figure remains more than a quarter lower (27.4 per cent) on the same time in 2019.

Experts within the industry offer their comments on HMRC’s latest figures and views on what is to come in future market conditions…..

John Phillips, National Operations Director at Just Mortgages said:

“Demand has come flooding back to the market since lockdown and a lot of our brokers are reporting that they are busier than ever. People who were thinking about a move before lockdown have been joined by others who are looking for somewhere new to meet changing requirements.

“There are some clouds on the horizon too: as the furlough scheme unwinds, it is likely we will see unemployment rise, and it remains to be seen how long the economic downturn will last.

“But the Stamp Duty relaxation is a welcome boost, and that won’t yet be showing through in these figures. and lenders are beginning to show some movement on bringing back higher-LTV products, which should help first-time buyers.

“One thing we can be pretty certain of is that, barring a second wave of coronavirus and a further lockdown, the second half of 2020 will be better than the first. July’s figures are a promising start to that.”

Jonathan Sealey, CEO at Hope Capital added:

“The 14.5% increase in transactions from June to July is further evidence that the market is continuing to recover strongly from lockdown. These figures will not yet show the full effect of the Stamp Duty holiday so we’d expect to see this bolstered further as we move into autumn.

“Although there’s clearly a long way to go for the market as a whole to get back to where it was, at Hope Capital we are seeing stunning levels of inquiries, way up on last year.

“Covid-19 has created changing patterns of demand, as people adapt to a slightly different lifestyle, with less commuting and more working at home. This is also likely to feed through into increased transaction volumes, with many people considering a move away from large towns and cities.

“As the recovery unfolds, we’re expecting to see a lot of demand from buy-to-let landlords, taking advantage of the Stamp Duty cut to expand their portfolio and provide rented housing that meets people’s desire for somewhere quiet to work at home, and better access to the great outdoors.”

Richard Pike, Phoebus Software Sales and Marketing Director commented:

“The latest figures from HMRC show what we had all been expecting following the end of lockdown and further easing of restrictions as the government tries to get the economy moving again. There was always going to be an amount of pent up demand which, when coupled with the SDLT holiday and the fact that people are more open to relocating, because of new acceptable working patterns, has given the market a kick start.

“It is an encouraging sign to be sure, but as ever it also has to been regarded with an element of caution. Many will be looking to take advantage of incentives before the government pulls the purse strings closed. But, in creating a finite date of 31st March 2021, will we see an “artificial” increase in house prices, as people try to save on stamp-duty, and then a slump in prices when the tax returns on the 1st April? The next three months will be very interesting as we see figures released following a summer post lockdown.”

Andy Sommerville, Director of Search Acumen, comments:

“July’s transaction data exposes the stimulus that raising the Stamp Duty threshold has injected into the property market.

“The recovery in transaction levels may be partly driven by consumers relocating to the suburbs and countryside due to their experiences of lockdown and desire for outdoor spaces which are harder to come by in cities.

“At the same time Covid-19 has prompted retailers to abandon city and town high streets and leave commercial leases early to reduce their cost base. These spaces have been identified as sources of affordable housing to help address the UK’s housing shortage and are part of the government’s wider review of planning.

“Better data consumption and uptake of technology will be central to the shake-up of England’s antiquated planning systems. Planners will then be well equipped to work with developers to get buyers into homes. Digitisation must be embraced by everyone across the property industry to enable it to reach its full potential and contribute to the country’s economic recovery.”

Rob Barnard, Director of Intermediaries at Masthaven, further commented:

“Today’s figures are a promising sign that the housing market is beginning to return to pre-Covid levels, with buyer confidence growing as we emerge from lockdown.

“However, while there may be some customers taking advantage of the stamp duty holiday and driving demand in the housing market, there will be many others who are struggling to secure mainstream finance, particularly those who have been financially impacted by the pandemic.

“As the number of ‘non-vanilla’ customers continues to rise, specialist lenders will play an increasingly important role in the recovery of the housing market. Customers who are self-employed, have been furloughed or have taken mortgage payment holidays will all need greater support in the months to come. Specialist lenders are in a prime position to help these borrowers find the right tailored lending solution for their situation and must continue to work with intermediaries to ensure customers have access to the funding they need as the country returns to some form of normal.”

Mark Harris, Chief Executive of Mortgage Broker SPF Private Clients, added:

“While it’s still too early for the stamp duty holiday to feed through to HMRC’s July numbers, transactions continued to pick up owing to pent-up demand. Of much more interest will be September’s data when the full impact of the stamp duty exemption will be felt and the bustle of activity that we are seeing will feed through to the official numbers.

“Lenders remain keen to lend although they are exceptionally busy due to higher demand, dealing with the summer holidays and other demands placed on them by the fallout from the pandemic, with closer scrutiny of borrowers’ incomes meaning everything is taking longer. Rates are still competitively priced although at higher loan-to-values in particular they are creeping up.”

Anna Clare Harper, author of Strategic Property Investing, said:

“The upward trend in transactions data reflects a piece of positive news for all of us: the housing market is moving again after a complex start to the year.

“This change reflects a release of pent-up demand and supply.

“What we’re seeing in the market, which will be reflected in August and September’s data, is the further influence of recent and temporary policies.

“The temporary Stamp Duty Land Tax change is helping those home buyers and investors who are looking to buy a property worth less than £500,000 in particular.

“We don’t know for sure what will happen next: economically, or in policy. But what we can predict accurately is that two crucial factors – economic confidence and policy – will prove fundamental to the future of the UK housing market.”

Alan Cleary, Managing Director, mortgages at OneSavings Bank, said:

“It’s no surprise that market activity is down on 2019 transactions, but it’s encouraging to see a significant uptick since the easing of lockdown.

“With the market experiencing its busiest month for enquiries in more than 10 years in July, according to Rightmove, as a result of pent up demand and the government stimulus on stamp duty we should see an improvement in transaction levels in months to come.

“First time buyers, homeowners and landlords wishing to take advantage of the stamp duty relaxation should move sooner rather than later to ensure they don’t miss the deadline.”

Read more on the latest HMRC Statistics here.

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