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Home transactions settle back to pre-Covid levels with ‘best sellers’ market in decades’

More than 85,000 homes changed hands in January, with property transactions up on pre-Covid averages, HMRC data has revealed.

Official figures show that the provisional non-seasonally adjusted estimate of UK residential transactions for January 2022 was 85,520. This was 22.2 per cent lower than December 2021.

There were seven per cent more transactions than the pre-pandemic 2017-2019 January average.

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However, there were 13 per cent fewer transactions than in January last year.

Lawrence Bowles, director of research at Savills, said: “It’s no surprise we’re seeing transaction activity start to ease back. Last year’s stamp duty holiday is now a distant memory, and a slowdown in the number of homes listed for sale means it’s looking more and more like a seller’s market. Figures from TwentyCi show the supply of homes for sale is -10 per cent below the 2017-19 average.”

He added: “That imbalance in supply and demand will continue to put upward pressure on values, though rising mortgage rates will impact affordability and ultimately slow potential growth. We’re predicting average UK house prices will rise 3.5 per cent this year and 13.1 per cent by 2026.”

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Jason Tebb, chief executive officer of property search website, said some of last year’s “frenetic market activity” had “dissipated” with home transactions settling back to pre-Covid levels.

He added: “However, while the stamp duty holiday incentivised many buyers, there are still plenty of purchasers who didn’t make a move last year and are keen to do so, determined to take advantage of a competitive mortgage market.

“As we head towards what is usually a busy spring market, the number of available properties for sale is still a long way short of meeting buyer demand. Our own data indicates that home mover confidence remains solid, which is translating into consistent momentum in terms of serious property seekers who are actively searching for a property to buy or rent. Correctly priced properties are going under offer quickly and it remains the best sellers’ market in decades.”


Source: City AM

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November property transactions up 24% from October: HMRC

UK residential property transactions increased by 24.3% in November compared to the previous month, the latest statistics from HMRC show.

However, the 96,290 residential transactions last month was 16.4% lower than November 2020 on a seasonally adjusted basis.

Non-residential transactions last month were 10,840, 15.9% higher than November 2020 and 9% higher than October 2021.

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The provisional non-seasonally adjusted estimate of UK residential property transactions in November 2021 is 104,980, 13.4% lower than November 2020 and 22.7% higher than October 2021.

The provisional non-seasonally adjusted estimate of UK non-residential transactions in November 2021 is 11,340, 21.3% higher than November 2020 and 10.9% higher than October 2021.

Karen Noye says: “The increase in sales may well be halted in the coming months now that the Bank of England has increased interest rates as mortgage rates will subsequently rise. While the BoE had not yet made its decision to increase rates when this data was collected, lenders had already started to raise their mortgage rates as a result of wide speculation of a hike.

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“Now the Bank has raised rates to 0.25%, prospective buyers may well be put off. Highly inflated house prices coupled with higher mortgage rates as a result of the hike will make buying a home all the more unaffordable.

“First time buyers, who are already often dealt the highest mortgage rates due to high loan-to-value ratios, will see the property ladder pushed one step further away.

“While it may make buying a home more difficult in the short term, the interest rate rise could well serve to knock back the massively inflated housing market. As less people are keen to move and demand decreases, house prices may well fall – albeit probably at a slower pace than some may hope.

By Bek Commane

Source: Mortgage Finance Gazette

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Halifax: Homemover numbers highest since 2007

The number of people moving home more than doubled (132%) to 265,070 in the first half of 2021, compared to the same period last year, according to the latest Halifax Homemover Review.

There were an additional 151,040 transactions in the first six months of this year, in contrast to the same period in 2020, where 114,030 home moves took place.

In the 12 months to June 2021, 461,010 home moves took place, up by more than 50% on the previous 12 months. The total number of moves in the last year is almost 100,000 more than at any point in the last 10 years.

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This leap in property transactions comes after several years of flat or falling numbers and brought the annual total to the highest it’s been since 2007, when it hit 716,650.

First-time buyers also returned to the market in force during the first half of the year, with 210,900 transactions, an increase of 74% on the same six months last year. Those getting their first foot on the housing ladder accounted for nearly half (44%) of all sales in the period.

Across the UK there was a year-on-year doubling of the number of homemovers (132%). Every region in England and Wales saw transaction numbers double in the first half of 2021 compared to the same period last year, while Scotland saw an 86% increase.

The regions with the largest increases in home movers were the South East (169%) and London (165%). Northern Ireland has seen the greatest long-term increase, with a 182% rise over the last 10 years. In comparison, London has experienced a 64% rise over the same period.

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A ‘race for space’, as workers adjust to a future where working from home more frequently, is reflected by changes in the mix of property type bought. Detached homes were the most popular for movers (30%), slightly ahead of semi-detached properties (28%).

The largest rise in detached home purchases over the last 10 years was in the West Midlands (14%), while its neighbour, the East Midlands, experienced a fall of almost 9% in semi-detached sales.

The average price paid by homemovers rose 11% in the 12 months to September 2021, to £387,485. Wales (£276,849), East Midlands (£320,715) and Yorkshire and the Humber (£284,268) all saw prices rise by 16% over the year, whereas Greater London (£699,864) saw prices rise by just 5%, the lowest of any region.

Homemovers put down an average deposit of £134,227, equivalent to 35% of the purchase price. Average deposits were worth at least 30% of the property in all UK regions. Highest deposit levels are in the South West (38%), with the North having the lowest at 30%.

Andrew Asaam, mortgages director at Halifax, said: “The rate and scale of the growth of the homemover market is quite remarkable. After several years of flat transaction numbers then a marked fall at the start of the pandemic, we’re now at a level not seen since 2007.

“There are many factors that have driven this activity, perhaps the biggest of which is the ‘race for space’ amongst those planning to work from home in the long term. The timing of some these moves will also have been influenced by people wanting to benefit from the stamp duty holiday.

“It is important to recognize the boom in sales was not limited to movers. There were more first-time buyers in the first six months of this this year, than in the first half of any of the last 10 years.

“Those getting on to the housing ladder accounted for almost half of all mortgage-backed purchases, which is in line with the long-term average.”

By Jake Carter

Source: Mortgage Introducer

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Property transactions reach highest levels ever recorded

The number of property transactions registered in England and Wales was up 20% over the last quarter, rising to 290,248 in Q2 2021, up from 241,916 in Q1 2021, according to the latest Conveyancing Market Tracker from Search Acumen.

This is the highest number of quarterly transactions since records began ten years ago in Q2 2011.

Conveyancing volumes in Q2 2021 were 252% higher than the year before, when the COVID-19 pandemic first hit the nation and the property market temporarily shut down.

With just 82,385 transactions having completed during Q2 2020, this quarterly total was beaten during every single month of Q2 2021 as the stamp duty incentive prompted unprecedented buyer demand.

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Search Acumen’s analysis shows June 2021 was the busiest month of the quarter, with 113,184 transactions taking place. This was the highest monthly total since April 2016, when stamp duty changes hiked tax bills for landlords and second home buyers.

The tracker shows it was ‘all hands on deck’ in response to record demand in the market. Active firms climbed 2% over the last quarter to 4,048 in Q2 2021, up from 3,962 in the previous quarter.

The number of firms registering transactions crossed the 4,000 point for the first time since the pandemic first hit, reaching levels last seen in Q3 2019 when 4,024 firms were active.

Comparisons to Q2 2020 further illustrate the pace of recovery, when there were just 2,411 firms active during the first lockdown. Q2 2021 figures represent a 68% increase from the heights of the pandemic when many property transactions were halted in their tracks.

In contrast, the average firm saw record levels of business in Q2 2021 with their average number of property transactions reaching a new high. This measure increased by 17% over the last quarter to 72 – underlining the extreme pressure that conveyancers have had to work under amid unprecedented market activity.

Average transaction volumes saw a considerable increase from when the pandemic took hold in Q2 2020, when average caseloads dropped to just 34. Looking back over the last three years before the pandemic struck, the average firm had been accustomed to completing no more than 65 transactions per quarter until this new pinnacle of activity emerged.

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Andy Sommerville, director of Search Acumen, said: “This data highlights the huge pressures placed on the property sector over recent months. The record-breaking number of transactions completed, particularly in June, are a testament to the hard work of the entire industry from conveyancers and lawyers to estate agents and surveyors, who have gone above and beyond to help clients beat the stamp duty cut off.

“It is important to remember the industry has been put under intense pressure since the holiday was first introduced last summer. The large caseloads that have been processed have not only relied on the hard work of individuals but made it vital that firms have efficient workflows in place to help manage rising demand.

“Digital due diligence has been essential to handle the pressure, and the months ahead are an opportunity for the industry to build on new ways of working that have paid dividends to date. While commitment may be required, the long-term benefits make any learning curve worth the effort. Lawyers and clients alike can both benefit from time savings, along with the enhanced advice lawyers can provide when they are equipped with accessible and accurate property data. A more efficient and seamless transaction process hinges on more widespread adoption of technology.”

Source: Mortgage Introducer

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Stamp duty holiday generates 140,000 ‘extra’ transactions

The stamp duty holiday has generated 140,000 “extra” transactions in the UK mortgage market but contributed a meagre 0.1 per cent of GDP, according to a report.

In its report, ‘Lessons From The Stamp Duty Holiday’, the London School of Economics said thousands of homebuyers had been helped by the tax break but when it came to consumption the effect was not as great.

LSE distinguished policy fellow Kath Scanlon told FTAdviser in an online briefing: “I dare say there were other tax changes one could have made which would have stimulated more consumption.”

The holiday enabled first-time buyers to avoid stamp duty land tax on up to £500,000 of a house purchase between July 2020 and June 2021. On average, it saved individual buyers £15,000, according to the report.

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The government introduced the tax holiday to stimulate the housing market and to increase expenditure on goods and services relating to housing transactions.

But LSE found the “extra” 140,000 transactions, which it defined as “transactions which would not have taken place without the holiday”, sparked expenses of an average of £16,000 per transaction.

This totalled around £2.2bn, though LSE clarified in its report that this figure could sit anywhere between £1.8 to £2.7bn, “given the very large uncertainties around these figures”.

With the UK gross domestic product totalling £1.96trn in 2020, this means the stamp duty holiday expenditure contributed just a fraction, 0.1 per cent, to countrywide spending.

The biggest values in the stamp duty holiday expenditure total came from bathroom and kitchen renovations. Followed by gas rewiring, and then furniture.

LSE’s report added these values to the pre-sale improvements sellers made prior to putting their property on the market to attract buyers to calculate final expenditure.

For the economy as a whole, Scanlon said the stamp duty tax holiday probably wasn’t “so much” worthwhile due to the spike in house prices, compared to how worthwhile it was for the industry and its employers.

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“But this [the stamp duty tax holiday] was chartered at the housing market specifically and it seems to have been successful.”

When the holiday came into force, house prices began to climb, enjoying eight months of uninterrupted growth.

According to the Office of National Statistics’ (ONS) latest house price index, UK average house prices have increased by 10 per cent over the year to May 2021.

Scanlon said it would be interesting to compare the stamp duty holiday with the government’s Eat Out to Help Out scheme.

Whilst the LSE report did not explore this, Barclaycard figures showed the latter scheme prompted a 34 per cent jump in spending on dining out. The Treasury estimated the average claim was about £5 during the scheme’s tenure, totalling to an estimated 80m claims which cost it £400m.

Other contributing factors LSE cited in its report for the rise in house prices, alongside stamp duty tax, included the pandemic induced shift to rural areas with more space.

“The tax holiday was not wholly responsible for house price rise,” said Scanlon. “Consumer behaviours [due to the pandemic] really reshaped the housing market. Though we still don’t know if this is temporary, or here to stay.”

By Ruby Hinchliffe

Source: FT Adviser

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Stamp duty holiday sees 22% rise in monthly property transactions

The Stamp Duty Land Tax (SDLT) holiday has delivered market stimulus that has far outweighed the immediate response to the 2007/08 financial crisis, according to analysis by Search Acumen.

And the current SDLT relaxation has so far triggered a 7% rise in house prices from June 2020 to February 2021, adding £17,265 to the price of the average home in England.

This rise has more than offset the £2,572 SDLT savings made on the average property.

On average 103,724 residential property transactions have occurred each month across England and Northern Ireland since the tax break was introduced, up 22% from the 84,691 average in the 12 months to March 2020.

Since the measure was introduced, 171,303 extra deals have taken place compared to the pre-COVID period in 2019/20.

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Search Acumen’s analysis showed the SDLT holiday of 2008/09 in the wake of the Great Financial Crisis saw an average of 60,048 transactions per month. This was down 27% from the previous 12-month average of 82,378 monthly residential property transactions.

Higher transaction volumes during the current holiday could be partly attributed to lending conditions being more favourable than in the aftermath of the financial crisis.

Strong credit availability has helped property transactions progress despite pandemic-induced disruption to the economy, with the tightening of credit mainly concentrated in the high loan-to-value (LTV) segment of the mortgage market.

Andy Sommerville, director at Search Acumen, said: “This analysis suggests the property market has been far more responsive to intervention compared to the post-financial crisis holiday.

“The housing market’s strong performance compared to the wider economy highlights the contrast between the current healthcare crisis and its economic impacts, and the 2008/09 crisis which was rooted in financial markets.

“While many households have absorbed income hits and face greater job insecurity, the UK’s financial system has held up reasonably well since the onset of COVID. Lenders did pull back from the mortgage market in the early stages of the pandemic, but the flow of credit has gradually picked up as banks got to grips with the crisis.

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“As a result, financing for house purchases has been in reasonably good supply and worked in tandem with the SDLT holiday to generate a level of activity not seen for a decade³, despite the unprecedented challenges of COVID-19.

“However, giving extra support for buyers has had many challenging consequences, from pushing up house prices and negating the average saving to heaping a heavy workload on time-pressured conveyancers.

“Property lawyers have been working around the clock to get people into their homes before the initial 31 March cut off. The conveyancing workload is unlikely to get any lighter given the holiday is now running until June and tapering through to September.

“In the long-term, the industry needs to put conveyancing capacity – not to mention mental wellbeing – at the top of the agenda given the pressure law firms have been under to ensure clients complete on time.

“It is clear the traditional way of performing due diligence on transactions is getting in the way of efficiency, and we need to pivot quickly to digital, data-led solutions that can improve the experience for homebuyers and their advisers.”

Source: Mortgage Introducer

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Majority of Property Transactions Since May 2020 Backed by Mortgages

Mortgages have fuelled 70% of property transactions across Great Britain since the market reopened back in May of last year, after initial lockdown restrictions were imposed, according to a research.

Enness analysed market data on mortgage-financed sales as a percentage of all sales in each area of Britain between May 2020 and November 2020.

While 270,785 of the 387,667 homes sold across Britain (70%) have seen the buyer backed by a mortgage, there is some regional difference. In London, 80% of all sales have come through homebuyers with a mortgage, with the East of England, West Midlands (72%), the South East and East Midlands (71%) also coming in higher than the national benchmark.

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In contrast, the South West is home to the most cash homebuyers with just 64% of homebuyers purchasing via a mortgage.

With the capital home to the largest regional percentage of mortgage-backed purchases, London also accounts for the top three highest at local authority level. Lewisham is the mortgage hotspot of Britain for homebuyers with 88% of all transactions financed via the sector, followed by Barking and Dagenham and Waltham Forest (87%).

Slough and Crawley are home to the highest percentage of mortgage-based purchases outside of London along with Hillingdon (86%).

At the other end of the spectrum, just 40% of property transactions in East Lindsey have been financed by a mortgage since the market reopened in May of last year. North Norfolk (43%), Argyll and Bute (44%), Torridge, Ceredigion (45%), Scarborough (48%), Rother, South Hams and Pembrokeshire also rank with some of the lowest levels of mortgage-financed transactions.

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“A lot has been made about the boost in buyer demand due to the stamp duty holiday, but it’s the continued low rates of borrowing that have really been the foundation of this heightened market activity.

While a stamp duty saving is nice, the ability to secure finance at a much lower rate of interest than historically possible has brought about a major boost to market sentiment in recent years and the impact is clear, with 70% of all transactions financed as such.

Some lenders have begun to tighten their lending criteria and this could make it harder for those with a less stable financial background to obtain a mortgage. However, it’s unlikely to impact the actual ratio of mortgage-financed buyers in relation to those purchasing with cash, particularly while the Bank of England keeps rates at sub-one per cent.”


Source: Property Wire

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Property transactions have jumped 27% in one month

The number of property transactions registered in England and Wales jumped 27% between November and December 2020, the Conveyancing Market Tracker from Search Acumen found.

The final month of 2020 saw 73,142 completed property transactions logged by conveyancing firms, up from 57,632 in November 2020.

The number of active conveyancing firms has recovered from a low during the first pandemic-induced lockdown, increasing by 58% to 3,808 in Q4 from a low of 2,411 in Q2 2020.

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Andy Sommerville, director at Search Acumen, said: “This latest data reveals how much more resilient the property market has been to pandemic-induced shocks compared to the wider economy.

“The surge in activity in the property market can be largely attributed to buyers rushing to capture the savings on offer through the higher stamp duty threshold.

“Demand has also been stimulated by a change in consumer appetite for properties outside of cities with access to green spaces, as more people than ever before are working from home.”

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He added: “The stamp duty deadline has put enormous pressure on the conveyancing industry and the traditional processes underpinning much of it, not to mention putting lawyers’ stress levels and patience to the test.

“This capacity crunch is set to escalate over the next few months and stretch the limits of existing working practices. The conveyancing market is crying out for innovation to better respond to consumer demand.”


Source: Property Wire

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Scottish home sales record 119% rebound

The volume of Scottish home sales surged at the end of 2020, analysis of ONS data from property firm Apropos by DJ Alexander has found.

Between September and November there were 35,610 property transactions, up from 16,220 between June and August.

The 119% increase was much greater than the volume of transactions across the rest of the UK. The UK figure was 48% up; in England it rose 44%; in Wales it increased 66%; while in Northern Ireland it was up 77%.

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David Alexander, joint chief executive officer of apropos by DJ Alexander, said: “These figures highlight just how successful the stamp duty holiday has been across the whole of the UK with each nation recording substantial increases in the volume of sales coupled with rising prices.”

“However, it is clear that Scotland has been enjoying a greater boom in house sales than the rest of the UK with more than double the volume in the latest three months compared with the previous three-month period.

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“Given that the relaxation of the threshold for land and buildings transaction tax (LBTT) in July is clearly the source of this housing boom it would seem questionable to let this suddenly end on the 31st March.”

Alexander added: “With the Scottish budget happening next week it would be the ideal opportunity for the Scottish Government to signal its intent on preserving the growth in the property market by announcing a continuation of the stamp duty holiday beyond March to ensure there is no sudden decline in activity.”


Source: Property Wire

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Property Transactions Are Back To Pre-Covid Levels

There were just over 98,000 residential property transactions in September, 0.7 per cent lower than in September 2019 but 20.3 per cent higher than in August this year.

The figures come from the Inland Revenue which logs monthly property transactions completed in the UK with value of £40,000 or above for Stamp Duty Land Tax purposes.

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‘Provisional residential transactions estimates in September 2020 have noticeably increased compared to August 2020, likely due to the continued release of pent-up demand within the property market since March 2020 and early impacts from the temporarily increased nil rate band of SDLT’, said the Revenue.

Residential transactions decreased significantly in April 2020, reflecting the impact of the Coronavirus and public health measures taken in response.

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Between 2005 and 2020, monthly transactions have varied between 160,000 (the height hit in 2006) and a low of 40,000 in August this year. At close to 100,000, the number of transactions is back up to levels seen consistently since 2013.

The nil rate band for residential SDLT was increased to £500,000 from 8 July 2020 to 31 March 2021 for transactions in England and Northern Ireland.

Source: Residential Landlord

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