The number of residential property sales agreed have surged in the month since the chancellor announced a stamp duty holiday, with demand for properties rising sharply, according to figures from the UK’s largest property website.
Rightmove has recorded the highest number of sales agreed in a month since it started tracking this data more than a decade ago.
According to the property portal, agreed sales are up 20% on the previous high, with a record total value of over £37bn.
The stamp duty cut, which was announced by Rishi Sunak as part of a package of measures to support jobs, means anyone spending more than £500,000 on a property is set to save £15,000 if they buy before 31 March next year, and this has helped to fuel demand for property.
At the same time, the number of properties coming to market in a month hit its highest level since March 2008.
Asking prices, according to the data, have increased in ten out of 12 regions, with a record high in new seller asking prices in seven of those regions.
Property prices typically fall at this time of year, as sellers try to tempt holiday distracted buyers, with the national average monthly fall for the last ten years being 1.2%.
While there is a marginal decline of 0.2%, or £768, this is due to London’s more normal seasonal fall of 2%, reversing what would otherwise have been an unseasonal national rise.
Miles Shipside, Rightmove director and housing market analyst, said: “There have been many changes as a result of the unprecedented pandemic, and these include a rewriting of the previously predictable seasonal rulebook for housing market activity and prices.
“Home movers are both marketing and buying more property than we have recorded in any previous month for over ten years, helping push prices to their highest ever level in seven regions.
“Rather than just a release of existing pent-up demand due to the suspension of the housing market during lockdown, there’s an added layer of additional demand due to people’s changed housing priorities after the experience of lockdown. This is also keeping up the momentum of the unexpected mini-boom, which is now going longer and faster.
“We associate this time of year with diving into the pool rather than the property market, and of sand and sun rather than bricks and mortar, but buyers have had a record £37bn monthly spending spree.”
The number of monthly sales agreed is the highest that Rightmove have ever measured since the website started tracking this figure ten years ago, up by 38% on the prior year.
It would appear that the increase in activity is not just a result of the stamp duty holiday, as sales agreed are up across all sectors of the market.
They are up 29% in the first-time buyer sector, 38% in the second stepper sector and 59% for larger, top of the ladder homes.
Momentum is still building, with the latest weekly figure for the number of sales agreed having shot up by 60% compared to the same week a year ago.
As part of the virtuous home moving circle, homeowners are bringing more properties to market than in any month since 2008, giving more choice to buyers.
There are 44% more properties coming to market compared to the same period a year ago, though there are considerable regional variations.
Shipside added: “More property is coming to market than a year ago in all regions, and at a national level the new supply and heightened demand seem relatively balanced. However, those expressing most desire to move on are unsurprisingly in London and its commuter belt.
“London has 69% more properties coming to market, with the South East at 60% and the East at 56%. With work and transport patterns potentially changing most around the capital, commuter-belt properties need to have more appeal to prospective buyers than just proximity to a station.
“Many buyers do appear to be satisfying their new needs in these regions, as the number of sales agreed in each is also at a record level. The out-of-city exodus has helped push prices to record levels in Devon and Cornwall, for example, where working from home means a different lifestyle much closer to your new doorstep.”
Record levels of pent-up and new buyer demand mean that there is extra pressure on the lending and legal areas of the home moving process. The average time between agreeing a sale and moving in was already around three months before lockdown and now there is a ten-year high in the number of sales being agreed.
Mortgage lenders and conveyancers may struggle to cope with the increased workload, not only now but as pressure rises further in the run-up to the 31st March stamp duty holiday deadline.
Shipside continued: “Not only are we seeing an unusually busy summer period, but also parts of the lending and legal sectors are having to cope with capacity constraints, as some staff will still be on furlough while many will still be working from home. Patience will be required, especially with some lenders limiting their product ranges due to capacity constraints in their ability to process mortgages.
“To minimise the risk of missing the 31st March stamp duty deadline it’s best to plan well ahead. This busy pace of the market looks set to continue in the short term, and although the market has proven resilient since reopening we still need to be mindful of the wider economic concerns as the year progresses.”