Pent-up demand pushes residential transactions up 14%
HMRC said this was likely due to pent-up demand following the lockdown and noted the impact of the stamp duty holiday would be seen in transactions in late August or early September.
However, residential property transactions were still 27.4% lower when compared to the same month last year.
And provisional figures for the second quarter of the year suggest the 151,950 transactions completed was the lowest from April to June since 2005.
Previous lows were seen during the peak of the financial crisis in the second half of 2008 and the first half of 2009. Outside these periods, quarterly transactions have remained above 200,000.
Looking to the future
Richard Pike, sales and marketing director at Phoebus Software, said pent-up demand was to be expected but wondered if the activity would be sustainable.
He said: “It is an encouraging sign, but as ever it also has to be 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 31 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.”
Andrew Southern, chairman of property developer Southern Grove, said if sales volumes could make up for lost activity a change in policy might be required.
“If sales can climb out of this rut, then it could be the one thing that might convince the chancellor to make the stamp duty holiday a more permanent arrangement — something the property market badly needs,” he added.