With the stamp duty holiday deadline looming at the end of March, the UK property market is likely to see strong activity continue into 2021.
In recent months, the housing market has remained busy, despite the market typically facing a slowdown this time of year. The stamp duty holiday, which was put in place in July, has boosted the housing market. This tax holiday has become a major factor in high demand and property price growth.
The UK property market continues to see record-breaking figures of prospective buyers and transaction levels. And buying and selling is likely to continue at strong levels into the new year.
Demand hitting record heights
October is usually when the market starts to slow down for the year. However, that didn’t happen this year. NAEA Propertymark’s October Housing Market Report revealed the number of prospective buyers reached the highest ever recorded for the month of October.
Additionally, the number of sales agreed hit the highest recorded number for that month since 2006. Mark Hayward, chief executive of NAEA Propertymark, says the property market boom has been “hugely beneficial” for the sector.
“Typically, we see the property market slow down as we approach the festive period and people put their sale on hold until the New Year. However, the pressure of completing sales ahead of the Stamp Duty holiday ending means that we have seen the number of potential buyers and the number of sales completed remains unusually high for this time of year.”
House prices on the rise
With demand and transaction levels hitting record highs, house prices have also been increasing. Data from Zoopla reveals house price growth is at a three-year high with prices jumping 3.5% in October. That amounts to a 1.2% rise from last year.
House prices are slated to increase even further in the short term as the property boom continues. With strong buying and selling numbers, Zoopla forecasts price inflation to hit 4% by the end of 2020.
It’s worth noting that house prices are strong across the board. All cities monitored by Zoopla’s House Price Index recorded higher growth rates than a year ago. This shows the UK property market as a whole is experiencing a boom.
The dash to beat the stamp duty holiday deadline
Even though the housing market typically faces a seasonal slowdown this time of year, there has been sustained buyer appetite. The UK property market is set to see its busiest December in over a decade, according to Zoopla. And this demand will continue into January as buyers attempt to beat the stamp duty holiday deadline on 31st March.
The property sales pipeline is 50% bigger than this time last year. Zoopla expects 2020 to end with 1.1m home transactions. On top of that, buyer appetite will lead to 100,000 additional sales completing before the end of March.
Richard Donnell, director of research and insight at Zoopla, states: “It has been a rollercoaster year for the housing market which is ending on a strong note, with demand and sales agreed still more than 30% higher than this time last year.
“It has been a remarkable turnaround and completed sales look set to fall just 6% short of last year despite a two-month closure of the market in England.”
With the UK property market set to finish 2020 strongly, despite a challenging year due to COVID-19, this momentum will roll over into the new year. Housing demand will likely slow down later in 2021 but not until after the stamp duty holiday deadline.
