The number of property sales registered by HM Revenue & Customs in August was down by 16.3 per cent year on year to 81,280, but compared to July it was 15.6 per cent higher.
While transaction levels have been recovering since lockdown lifted in May, volumes for the year to August are still 24 per cent lower than the same period in 2019 at 594,760.
Yopa chief analyst Mike Scott says: “New figures from HMRC for the number of home sales that completed in August show a continuing recovery, but the number of sales is still not back to normal.
“This is to be expected, since the sales completing in August would largely have been agreed in April and May, and the housing market was effectively closed for much of this period.
“There has now been time for some of the sales agreed after the market reopened in England, in mid-May to have completed, and we should see the recovery continue in next month’s figures.
“The market is now reported to be very active, with the stamp duty holiday spurring interest, buyers and sellers making up for lost time, and a large number of sales being agreed.
“We therefore expect the monthly numbers of sales to go above the previous year’s figures before the end of 2020, but there isn’t enough time to make up for all the sales lost earlier in the year, so the total for 2020 is certain to be well down on recent years.
“We expect to see fewer than 1.1m sales complete this year, whereas the number was more like 1.2m in every year from 2014 to 2019.
“This is still significantly better than experts anticipated back in April, when the housing market was closed during the lockdown.”
Private Finance director Shaun Church says: “This latest data reveals the scale of the sharp surge in activity levels in the housing market as a wave of buyers rushed to push through property purchases.
“The rise in transactions may be in part the result of a strong stream of pent-up demand continuing to flow following the reopening of the housing market.
“High levels of activity have been supported by buyers scrambling to take advantage of the financial incentives on offer through the higher stamp duty threshold.
“These have compounded to create a perfect storm making it appear as if it is business as usual.”
But he warns: “Strong activity levels are beginning to look artificial and may not last for long.
“Fears over the fragility of the UK’s economic recovery are rapidly mounting, driven in part by the increasing likelihood of the reintroduction of strict national lockdown measures.
“This is weighing on consumer confidence, which may cause people to avoid making big ticket purchases until they have greater certainty over their financial future.
“Activity is being primarily driven by buyers with access to high deposits moving to properties that better align with their new housing needs following long periods spent at home during lockdown.
“However, first-time buyers are largely being shut out of the market.
“This is in part the result of lenders reneging on higher loan-to-value products and tightening credit controls in order to hedge against riskier borrowing propositions.
“Unfortunately, this group of buyers have been hardest hit financially by the pandemic.
“Incredibly high demand levels are causing severe delays for buyers eager to kick-start purchases.
“Lenders are struggling to clear a swelling backlog of enquiries, which is extending processing times for mortgage applications. If these delays extend even further, consumers may rapidly lose confidence in the market, causing activity to sharply drop.”
