UK property transactions back to pre-pandemic levels

The latest figures from HMRC show that UK’s residential property transactions went up by 9.8% between September and October at 105,630 in the seasonally adjusted estimate. This is up 8.1 per cent year-on-year. Experts, however, expects this activity to fall as market activity slows down once the stamp holiday ends.

Source: HMRC

HMRC attributes the booms in property sales last month to the pent-up demand from investors since March and the effects of the temporary increase of the nil rate band for residential Stamp Duty Land Tax to ￡500,000 from 8 July 2020 to 31 March 2021, similar to Scotland and Wales.

The high demand has also forced property prices to increase by 4.7 per cent for an average of ￡250,000 in October.

Although this is a positive development for investors and a testament to the strength of the housing market, analysts caution buyers from getting carried away by the mini-boom. 

Despite the upward trend in property prices, the month-on-month growth based on Halifax House Price Index has slowed from 1.5 per cent in September to 0.3 per cent in October. This has prompted property professionals to predict a drop in property prices alongside the fall in demand once the stamp duty holiday ends. 

Investors who have been looking to buy a property in the UK can take advantage of the stamp duty holiday provided that they are buying for the long term and has a clear plan. Otherwise, they may have to contend with delays due to the high demand and fail to meet the deadline.

The slowdown in transactions alongside rising COVID-19 cases and job losses may likewise force some homeowners to put their property on sale below market value further driving property down.

Despite the uncertainty, the promising news about a viable vaccine for COVID-19 could provide some stability to the market. Stay-at-home orders are also fueling people's search for properties with more space to work and play.