UK real estate: increase in sales proves recovery of real estate market

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The latest Residential Transactions Report was released by HMRC this morning and contains details on the number of property sales made in June. On a seasonally adjusted basis, the total number of homes sold in the UK last month was 63.25, reflecting a 31.7 percent increase in the number of property deals closed in May. However, that figure was 35.9% lower than in June 2019, when 98,670 homes were sold.

Taken at face value, these figures show that a recovery in the housing market was well underway before the announcement of the Stamp Duty Holiday in England on July 8.It should also be remembered that Scotland and Wales were still subject to foreclosure measures until the end of June, meaning the majority of completed transactions reported last month were only so in England.

This would suggest that there will likely be another big jump in reported transactions figures for July when the data is released in August.

Tomer Aboody, director of real estate lender MT Finance, said of today’s report: “These numbers demonstrate the most abrupt shutdown of the real estate market we have ever seen due to foreclosure, followed by a rebound. of significant interest on the part of those wishing to purchase.

“We are still below last year’s figures, which in turn were down from the previous year, but confidence is regaining. ”

Tomer continued, “The Stamp Duty Festival played a big part and there is a lot of activity around.

“The market has been asking for a reduction in stamp duties for a few years and although this has not been widespread, it has fueled demand and encouraged buyers to come back and transact. ”

Echoing the noticeable increase in activity, Peter Ambrose, managing director of real estate law firm The Partnership, observed: “It is not surprising that the number of sales announced in June is down from Last year.

“Obviously, the closing of the real estate market in March had a huge impact on closing deals, as it typically takes around three months for deals to close.

“However, in London and the South East we were really surprised by the reaction of the market release and we have never been so busy. ”

Peter added: “When we look at the number of new client instructions now compared to the same period last year, they are up 70%, which is remarkable.

“The stamp duty holiday that was introduced a few weeks ago has meant that the number of new instructions has increased further. The numbers continue to go in one direction which is up, and we’re really bullish for the rest of the summer. ”

Guy Gittins, Managing Director of London-based estate agency chain Chestertons, also said: “June has been an incredibly busy month for all of our offices as we have faced record levels of new buyers wanting to act quickly.”

Guy went on to suggest that there was: “A noticeable difference in the attitude of buyers in June, with many realizing that prices are probably not going down any more and that there aren’t too many properties on the market. , therefore, they must use common sense. offer and act quickly.

But it is not only the capital that is experiencing strong demand. James Forrester, Managing Director of Birmingham Barrows and Forrester Estate Agents, observed: “The market here in the West Midlands has evolved significantly since the foreclosure doldrums with a huge increase in inquiries and visits.

‘Add to that the increased stamp duty holidays where the average Birmingham buyer will save around £ 2,000 and the stage is set for growth in transactions and prices in the region. “

With the average time to sell currently around 12 weeks from the time an offer is accepted – longer if the deal involves a chain – we likely won’t see the effect of stamp duty holiday regimes reflected in them. completion figures by October at the earliest. , when data for September becomes available.

While the resurgent positivity is very welcome, the reality is the housing market is not out of the woods just yet as the specter of rising unemployment continues to mount.

Access to mortgage borrowing is another key factor, with the current shortage of low deposit products creating a barrier to entry for many first-time buyers, although lenders are gradually starting to return to this particular industry. .

Only time will tell if the current level of positive sentiment can create enough momentum to avoid a significant correction in the coming months, or if it is just a temporary reprieve.

Follow Louisa on Twitter: @louisafletcher



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