There was a 48.5 per cent annual rise in UK residential transactions in February, say government figures.
At 147,050 transactions this is also 23 per cent higher than counted in January and is the biggest figure seen since March 2016.
Non-residential transactions grew strongly, too – at 10,630, 10.2 per cent than in February last year and 25.8 per cent more than in January.
These figures were not surprising for many – Phoebus Software sales and marketing director Richard Pike explains: “As was expected, the figures for February show the push to get transactions over the line before the original SDLT holiday deadline.
He adds: “However, the landscape changed again with the Budget and the market is likely to continue on its upward trajectory. With the mortgage guarantee scheme, higher LTV products, and lower rates, there is little to hold it back.
“Despite furlough and other government schemes to help,” Pike continues, “for many the toll of the past year is still to be fully seen. Although FCA guidance is still asking lenders to continue to consider repossession as a last resort, once the ban is lifted, the likelihood of repossessions rising in the second half of 2021 is almost inevitable. Lenders will have to be on the ball and work with borrowers to minimise this risk.”
Garrington Property Finders chief executive Jonathan Hopper says: “Clearly February’s extraordinary numbers are unlikely to be repeated… the spike in completions was the result of a ‘sprint finish’ as countless buyers strained every sinew to hit the finishing tape before the stamp duty deadline.
“Now the chancellor has moved the finish line back by several months, the pace is unlikely to stay quite as breathless. But the combination of a strong pipeline of would-be buyers, a gradual rolling back of lockdown and a growing sense of optimism should prove formidable.”
And Yopa chief analyst Mike Scott comments: “We believe that there is still a considerable amount of pent-up demand for a home move. When that demand is combined with over £100bn of ‘accidental savings’ from people who have maintained their incomes but been unable to spend much money over the past year, much of which may well find its way into the housing market, we expect that the market will remain buoyant for the rest of the year and into 2022.”
Others believe that a proposed capital gains tax “raid”, for which consultations will be published by the Treasury soon, may distort the market. “Faced with a looming hike in CGT, many landlords and second homeowners will try to sell before the tax hike takes effect,” says South Grove chairman Andrew Southern.
“This will include legions of accidental landlords who never intended to own buy-to-let properties in the first place.
“Residential valuations will also face a pincer movement later this year under this scenario. The hunger to move to larger homes is still prevalent and the stamp duty tax break is still in play until October. These are solid buy-side pressures but any increased supply courtesy of those selling to avoid paying tens of thousands more in capital gains tax will be a balancing force.
“It’s not impossible that this combination of factors could create one of the busiest and most fluid years for the property market in well over a decade but there’s still quite some ground to cover to make that a reality,” he concludes.
