'Powerful surge’ in UK property sales amid pandemic

Saleha Riaz
·2-min read
February’s sales were largely driven by buyers rushing to meet the stamp duty holiday deadline. Photo: Getty Images
February’s sales were largely driven by buyers rushing to meet the stamp duty holiday deadline. Photo: Getty Images

The latest UK government monthly property transactions data showed there was an almost 50% year-on-year increase in UK residential transactions in February. 

The provisional seasonally adjusted estimate of UK residential transactions in February was 147,050, 48.5% higher year-on-year and 23% higher month-on-month.

The provisional seasonally adjusted estimate of UK non-residential transactions in February was 10,630, 10.2% higher than February 2020 and 25.8% higher than January 2021.

Sales volumes have now exceeded 100,000 for five consecutive months on a seasonally adjusted basis, for the first time since the summer of 2017.

Some analysts said this could be due to a rush to meet the stamp duty holiday deadline, although this has since been extended.

“February’s sales were largely driven by buyers rushing to meet the stamp duty holiday deadline. Buyer confidence was further boosted by the well-organised vaccine rollout, the gradual easing of lockdown restrictions and people’s general desire to return to some form of normality," said Nick Barnes, head of research at Chestertons.

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“The pandemic has produced a powerful surge in sales volumes, which are still tracking the steep trajectory that first appeared last April. Any tightening of the capital gains tax (CGT) regime will pour more fuel on that fire as some of those affected race to beat its introduction,” said Andrew Southern, chairman of property developer Southern Grove, said.

He said that news of a proposed capital gains tax raid could come this week with consultations due to be published by the Treasury. Faced with a looming hike, many landlords and second home owners will try to sell before the tax hike takes effect.

“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," he noted.

In his Budget 2021 announcement, chancellor Rishi Sunak said the stamp duty holiday that was to end on 31 March would be extended it to the end of June.

The extension came after the industry warned the old deadline risked derailing large numbers of transactions. Parts of the property industry have struggled to cope with the scale of demand fuelled by the tax cuts and lifestyle changes in the wake of the pandemic, resulting in delays in the completion of sales.

A survey from earlier this month showed that the the majority of homebuyers in the UK have said that they would like to see stamp duty cut for good.