The height of summer is typically pretty quiet for the housing market, what with school holidays and hot weather – although we haven’t had much of the latter. Perhaps that’s why this August is so very different with buyers and sellers being remarkably busy.
Here are the stats.
As of August 1 some 67 per cent of all homes advertised for sale on Rightmove and Zoopla were under offer, meaning each estate agency branch on average has just 12 homes to sell.
Little wonder the National Association of Estate Agents says there’s an average of 19 house-hunters for every property still available as the pandemic continues to make many people reassess where they want to live.
Why Is This Summer Like No Other?
You probably won’t be surprised to discover the stamp duty holiday – which started a year ago – is still energising the market, despite the biggest savings no longer being available.
The holiday has encouraged a buying frenzy, and in over 25 years in the business, I’ve never known a market this busy.
HM Revenue & Customs says that in June (the latest figures available) there were 213,120 homes sold, which was twice the total in May.
Many of these were more expensive properties. The number of transactions involving properties bought for £500,000 or more increased by 37 per cent over the 12 months to June – that’s compared with a rise of just two per cent for all properties combined.
How the Stamp Duty Holiday Will End
The peak saving during much of the stamp duty holiday was £15,000. Even now, with the holiday ‘tapering down’, until September 30 there’s no stamp duty on the first £250,000 of a home’s purchase price, with buyers still able to save up to £2,500.
From October 1, stamp duty applies to any home above £125,001 – that’s the same as it was before the holiday was announced in 2020.
So, What Happens to the Market After the Holiday?
Without a crystal ball we cannot be sure, but the evidence points to an orderly slowing down in the housing market and definitely not a crash.
The latest Nationwide Building Society index shows price rises easing – even so, homes are on average 10.5 per cent more expensive now than just a year ago. Likewise, most estate agents say there are slightly fewer buyers currently (compared to previous months), although still more than usual for summer.
The pandemic still casts a shadow, of course. Almost 2m people are still furloughed so the true state of unemployment remains difficult to measure, although economic indicators suggest a quicker-than-expected bounce back in spending.
However, the key element keeping the housing market buoyant – even after the stamp duty holiday ends – will be the shortage of stock on agents’ websites and in their windows.
All regions of the country have seen at least a 20 per cent fall in the availability of family homes, says Zoopla: as these have been the most in demand for many months, and continue to be the buyers’ favourite, this mismatch in supply and demand should keep prices strong in the months to come.
Enjoy the sunshine – when it arrives!
Last Updated: October 19th, 2021