The report issued by HMRC this morning highlights that, when reviewing the data on an un-adjusted basis, there were 137,200 residential property transaction completions in December 2020. This represents an increase of 34 percent when compared to December 2019, when there were 102,270 transactions, as well as an uplift of 14 percent on completions in November 2020.
Taken as a whole, the figures highlight that on an unadjusted basis, a total of 1,047,490 homes were sold in the UK last year, compared to 1,176,820 in 2019.
Although this constitutes a reduction in the overall total of 10.9 percent when compared year on year, against the context of the economic and social impact of the Covid pandemic in 2020, the total number of homes sold clearly highlights both the strength of consumer demand and the robust nature of the UK property market.
Mortgage expert Andrew Montlake observed that December saw property transactions reach “fever pitch” as buyers rushed to beat the Stamp Duty Holiday deadline of the end of March.
Andrew commented: “The increase of nearly a third on the previous year is all the more impressive given that a lot of people in the latter stages of 2019 were keen to get into a new home before the Brexit endgame and the uncertainty that might entail.
“The worry now is of a collapse in property transactions from April onwards when the Stamp Duty holiday ends. Many people are banking on the Chancellor caving in to pressure and extending the deadline, but for now activity levels in the property and mortgage market are nothing short of frantic.”
It’s a view partly shared by former RICs residential chairman Jeremy Leaf, who suggested the December 2020 transaction figures: “Reflect the rush by most buyers to take advantage of Stamp Duty relief, which won’t be possible as things stand after the end of March.”
Jeremy added: “Since then, it is clear most new market entrants won’t be able to claim that assistance, unless of course it is extended, so we have already seen activity in the high street reduce quite considerably. But don’t expect a correction in prices.
“Ongoing demand, shortage of stock and availability, particularly of high loan-to-value mortgages, to say nothing of present lockdown arrangements, are fuelling a new pent-up demand wave, albeit weaker than last spring’s equivalent.”
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While the HMRC figures are of great interest to those in the property industry, what do they actually mean in practical for buyers and sellers who are in the midst of a home move at the moment?
Leading property lawyer Peter Ambrose of The Partnership recognised for those who are currently moving: “It’s a very stressful time. We are seeing pressure on all aspects of deals and issues that could be easily solved in the past which are now causing problems.
“For example, booking removal companies is difficult, with our clients given just a few hours to confirm or lose their slot.
“Also, clients are contacting us far more frequently than ever before, which unfortunately is slowing down the process.”
Going forwards, it seems that the next three months are probably only going to get busier, which is likely to mean it will take longer to move home. Peter explains: “From our experience so far of the first few weeks of 2021, we expect this trend of high numbers of completions to continue all the way up to the end of March and the end of the Stamp Duty holiday.
“However, we are also seeing new deals being put together, which as clients are fully aware, are extremely unlikely to meet that deadline.”
The key consideration for anyone currently in the moving process at the moment is to ensure that they have set aside the full amount of Stamp Duty payable in case they miss the current deadline. This can be provided for buyers by their solicitor, so that they have an exact figure to budget for.
In practical terms, there are other simple steps buyers and sellers can take themselves to speed up the process.
Peter Ambrose advised: “Try and reduce the number of contacts you make with your lawyer. For example, putting all your questions in one email can really help. The harsh reality is that the more contacts you make with your lawyer, the deal is actually more likely to take longer.”
Peter added: “Also, it’s probably not realistic to expect to hear back from an enquiry within hours, maybe give it a day or two before following up.
“Finally, make sure you’re on top of your paperwork. If your lawyer asks you to sign something, do this as quickly as possible.”
With research last week from property search website Rightmove suggesting that there are over 600,000 buyers currently trying to complete their purchase before the end of March, many eyes will be on Rishi Sunak in the coming weeks to see what, if any, assistance will be available for those who don’t make it across the finishing line in time.