Though schools across the country are now well into the summer holidays, the UK property market is continuing to recover. In fact, last month there were 74% more properties sold subject to contract compared with the same time last year, according to analysis from TwentyCi. With the number of buyers that registered with Savills nearly double that of July 2019, this momentum is likely to carry through to the Autumn, particularly given the boost of the Stamp Duty holiday. However, activity levels may prove difficult to sustain later in the year as furloughing unwinds.
The market is currently being driven by those with secure household finances, who are able to act on the desire for more space and a change of lifestyle created by the experience of the lockdown. This was apparent in our second client survey, which showed that buyers had become even more committed to moving, not only in the next 12 months, but also in the shorter term.
Meanwhile, the latest Nationwide house price index for July has reported that prices are up 1.7% month-on-month, reversing the fall reported in June. Zoopla has also seen an increase in prices and their latest report takes a closer look at how the imbalance of low supply and high demand have contributed to this.
The rise in mortgage approvals in June provided an early indication of the lift in transaction numbers. However, these levels remain significantly lower than they were prior to the pandemic.
According to the latest ARLA Propertymark Private Rented Sector report, tenant demand and rental supply reached record levels for June, but the number of new tenants registering is still down versus pre-lockdown figures. These findings match our own analysis of the prime rental market , which showed that as of mid-June, the number of new Savills tenants registering each week was 42% higher than the same period in 2019, and 55% higher than the average during the 12 weeks leading to lockdown.
Recent data on house prices, mortgages and lettings prove the market to be more robust than expected, but we should not read too much into one month’s figures, particularly given the prevailing economic uncertainty.
The latest statistics on tax revenue from property transactions across the UK show a year-on-year reduction of 44% during the second quarter of 2020, resulting from a similar drop in transaction numbers as reported by HMRC. However, a new study shows that tax reliefs across the country mean that buyers in the UK now pay among the lowest in tax in Europe.
This chimes with our analysis of Stamp Duty savings, as reported in the Sunday Times, which shows London buyers to be benefitting the most. The London market now appears good value in a historical context and a rebound is expected. This was one of the findings from our Savills Prime Index: World Cities research.
Against this backdrop, our latest research on London’s new homes market provides some useful considerations to help developers widen property appeal for families.
Finally, government support of the new homes market continues as the completion deadline for homes to comply with the Help to Buy equity loan scheme in England has been extended. From March 2023 onwards, once the Help to Buy scheme has come to an end, we will see more first-time buyers in need of assistance from the Bank of Mum and Dadand as such, their support is likely to increase further.