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HMRC: November residential transactions up 19.3% on last year

UK residential transactions in November 2020 stood at 115,190, 19.3% higher than November 2019 and 8.6% higher than October 2020, according to the latest stats from HMRC.

On the non-residential front transactions stood at 9,970, 6.9% higher than November 2019 and 10.3% higher than October 2020.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Transactions are always a better indicator of market health than more volatile house prices.

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“However, despite these numbers showing a still-accelerating trend, they reflect sales which were agreed several months previously. Since then, the market has been moving closer to hibernation as is traditional at this time of year.

“It will be a few months at least before transactions fall in line with the reduced activity that we have been seeing on the ground over the past few weeks. Nevertheless, prospects for 2021 remain relatively positive bearing in mind the determination of the overwhelming majority of buyers and sellers to complete their moves even if inevitably some will miss the stamp duty deadline.”

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Paul Stockwell of Gatehouse Bank added “The UK property market has undergone an incredible turnaround this year. In the space of seven months, sales volumes have rebounded from the lowest level since records began to a five-year high in November.

“The latest data shows mortgage approvals still running at a 13-year-high so, while it’s widely accepted that the bumper house price growth we’ve seen this year must cool as we enter 2021, a decline in the number of transactions is by no means assured. Annual growth in sales volumes has actually accelerated, more than doubling in the space of a month, which is excellent news for the property market as a whole.

“It is entirely possible that volumes hold up next year, even as valuations cool after a glut of activity fuelled by the stamp duty holiday and a widespread desire to move to larger homes after repeated lockdowns.”

Source: Mortgage Introducer

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Number of residential transactions up by 8.1%

The provisional seasonally adjusted estimate of UK residential transactions in October 2020 was 105,630, 8.1% higher than October 2019, according to data from the HMRC.

On a monthly basis, the number of UK residential transactions saw a 9.8% uplift.

Looking to non-residential transactions in October 2020, this figure stood at 9,140, which was 5.1% higher year-on-year, and up 6.2% on September 2020.

In addition, on a non-seasonally adjusted basis, there were 121,740 residential transactions in October 2020 which is a year-on-year increase of 13.7% and 23.7% higher than in September 2020.

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There were 9,840 non-residential transactions in October 2020, non-seasonally adjusted, which was down 6.1% on October 2019 however, up 12.8% month-on-month.

Sam Mitchell, chief executive of Strike, said: “October was another busy month for the housing market, with transactions still rising despite the tougher lockdown restrictions.

“The government’s stamp duty holiday has created such a strong pipeline of activity that we believe this pattern could continue right up until the end of March.

“It’s shaping up to be a phenomenal end to the year for the UK property market.

“News of a vaccine has boosted confidence, and people are still rushing to benefit from the stamp duty holiday incentive – both contributing to us having a record-breaking day for offers just last Monday.

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“Regardless, we don’t expect any change in the rising number of people looking to move in light of changing circumstances, with the lockdown baby boom and flexible working being two of the many reasons we’ve had more sellers than ever knocking at our door.”

Nigel Purves, chief executive of Wayhome, added: “The HMRC has reported a continued rise in the number of transactions in the residential property market, likely as buyers rush to complete before the stamp duty cut ends in March.

“The property boom is so far showing no signs of slowing down, and there is a risk of a two-track market emerging, where those who can afford to buy are accounting for the increase in property transactions and the reluctant renters and first time buyers are left behind.

“It’s time we address how to even the playing field when it comes to homeownership.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “The pent-up energy buyers have brought to the housing market since the end of the first national lockdown hasn’t abated and transaction volumes continue to climb.

“Deal levels have recovered from the April slump and are now higher than last year’s figures and, with data from the Bank of England showing mortgage approvals in September represented the highest levels of agreed borrowing since before the Global Financial Crisis, this trend looks likely to continue over the coming months.

“However, with the stamp duty discount deadline looming in March, sellers and buyers alike will feel the pressure to get the deal over-the-line as soon as possible, heaping pressure on the property industry as we close out the year.”

By Jake Carter

Source: Mortgage Introducer

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Property Transactions Are Back To Pre-Covid Levels

There were just over 98,000 residential property transactions in September, 0.7 per cent lower than in September 2019 but 20.3 per cent higher than in August this year.

The figures come from the Inland Revenue which logs monthly property transactions completed in the UK with value of £40,000 or above for Stamp Duty Land Tax purposes.

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‘Provisional residential transactions estimates in September 2020 have noticeably increased compared to August 2020, likely due to the continued release of pent-up demand within the property market since March 2020 and early impacts from the temporarily increased nil rate band of SDLT’, said the Revenue.

Residential transactions decreased significantly in April 2020, reflecting the impact of the Coronavirus and public health measures taken in response.

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Between 2005 and 2020, monthly transactions have varied between 160,000 (the height hit in 2006) and a low of 40,000 in August this year. At close to 100,000, the number of transactions is back up to levels seen consistently since 2013.

The nil rate band for residential SDLT was increased to £500,000 from 8 July 2020 to 31 March 2021 for transactions in England and Northern Ireland.

Source: Residential Landlord

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Residential transactions up 21.3% month-on-month

Property transactions increased by 21.3% from August to September, HMRC statistics show.

Following the rise they are slightly lower (0.7%) than September last year.

Alan Cleary, managing director for mortgages at OneSavings Bank, said: “Housing transactions continued to recover strongly in September which is great news for the market.

“At close to 100,000, the number of transactions was similar to a year earlier and in line with the monthly average in recent years.”

“With mortgage approvals for house purchase having risen to their highest levels since before the 2008 financial crisis, housing transactions are likely to rise further in the coming months as borrowing costs look set to remain at historically low levels.

“Bolstered by the government’s additional measures to support employment and boost demand during the winter months, housing market activity seems likely to strengthen further in the period immediately ahead.”

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John Phillips, national operations director, Just Mortgages and Spicerhaart said: “Numbers are higher than any of us expected to see and volume is consistently high across the country, surprisingly the South East and London are slightly quieter.

“The one downside has been the lack of lenders offering high LTV mortgages. There are still thousands of clients with 10% deposits who are safe investments and they are currently being blocked from owning a home.

“The market needs a steady supply of these products to support current applicants. Brokers are not concerned about service level agreements being stretched, delivering for the client is more important, timing is not the issue. If lenders can fix that, we expect the demand to continue for the rest of 2020.”

John Goodall, chief executive of specialist buy-to-let lender, Landbay, said: “The market both in buy-to-let and in residential is much more buoyant than any of us expected back in May.

“September has bounced back strongly and is now exceeding the strong levels of demand that we saw at the start of the year.

“We are seeing many landlords anticipating an increase in rental demand as it gets harder for people to get on the property ladder due to increasing unemployment and the reduction in high LTV mortgages.

“I expect this rise in numbers to continue into early 2021 as people rush to take advantage of the stamp duty holiday.”

BY RYAN BEMBRIDGE

Source: Property Wire

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HMRC: Residential transactions see monthly increase of 15.6%

Residential transactions saw a monthly increase of 15.6% in August according to the latest UK Property Transactions Statistics by HMRC.

Despite the monthly increase, year-on-year the figures show that the August figures (81,280) are 16.3% lower than August 2019.

There were 8,350 non-residential transactions in August, which is a yearly decrease of 15.5% and monthly increase of 7.5%.

HMRC’s data reveals that the residential transactions for Q2 was the lowest quarterly total since Q1 2009 following impact from the COVID-19 pandemic.

Mark Harris, chief executive of SPF Private Clients, said: “Despite only being introduced the previous month, the stamp duty holiday was already filtering through to transaction numbers in August as buyers rushed to take advantage of the saving.

“Despite the recovery in number of transactions compared with the previous month, the pandemic has had a significant impact on the market with August’s numbers down significantly on last year’s.

“The data illustrates just how long it takes for property transactions to complete and at the moment, with some lenders struggling with service levels, along with surveyors and lawyers, it is all taking longer than it usually would.

“Buyers need to be patient, as well as engage good advisers who can help steer the transaction through in as prompt a fashion as possible.”

Alan Cleary, managing director for mortgages at OneSavings Bank, added: “After a rocky start to the year, the continued uptick in activity is not only good for the market, but for buyers and sellers who are finally making progress with their property plans.

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“People on both sides want to make the most of low borrowing costs and the temporary removal of stamp duty which for now at least is helping to bolster the market.

“However, as we head into the often quieter months of the year, the uncertainty around the UK economy could mean that the strong levels of activity leading up to this point may start to wane.”

Jeremy Leaf, a former RICS chairman, believes that the market is showing determination to get transactions through.

Leaf said: ‘Transactions are a better barometer of market health than more volatile house prices.

“Although a little historic, and there is a delay between the point when the sale is agreed and completion, these numbers still demonstrate considerable resilience when we were emerging from the previous lockdown and before the stamp duty holiday could have much impact.

“On the ground, we have noticed no sign of sales collapsing, renegotiating on deals or price reductions in the past few days – more of a determination to carry on.”

By Jessica Nangle

Source: Mortgage Introducer

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Pent up demand sees residential transactions increase in July

The provisional seasonally adjusted estimate of UK residential property transactions in July 2020 was 70,710, 14.5% higher than June 2020, likely due to pent up demand following lockdown, according to the HMRC UK Property Transaction Statistics.

However, this was 27.4% lower than July 2019.

The seasonally adjusted estimate of UK non-residential property transactions in July 2020 was 8,380, 18.3% low er than July 2019, but 27.6% higher than June 2020.

The non-seasonally adjusted estimate of residential property transactions was 80,490, 23.2% lower than one year previous.

The non-seasonally adjusted estimate of non-residential property transactions in July 2020 was 8,770, 16.6% lower than July 2019.

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The Q2 2020 residential transactions count is the lowest quarterly total within the period of April 2005 to April 2020, reflecting the impacts of coronavirus.

Mark Harris, chief executive of SPF Private Clients, said: “While it’s still too early for the stamp duty holiday to feed through to HMRC’s July numbers, transactions continued to pick up owing to pent-up demand.

“Of much more interest will be September’s data when the full impact of the stamp duty exemption will be felt and the bustle of activity that we are seeing will feed through to the official numbers.

“Lenders remain keen to lend although they are exceptionally busy due to higher demand, dealing with the summer holidays and other demands placed on them by the fallout from the pandemic, with closer scrutiny of borrowers’ incomes meaning everything is taking longer.

“Rates are still competitively priced although at higher loan-to-values in particular they are creeping up.”

Anna Clare Harper, author of Strategic Property Investing, said: “The upward trend in transactions data reflects a piece of positive news for all of us: the housing market is moving again after a complex start to the year.

“This change reflects a release of pent-up demand and supply.

“What we’re seeing in the market, which will be reflected in August and September’s data, is the further influence of recent and temporary policies.

“The temporary Stamp Duty Land Tax change is helping those home buyers and investors who are looking to buy a property worth less than £500,000 in particular.

“We don’t know for sure what will happen next: economically, or in policy. But what we can predict accurately is that two crucial factors – economic confidence and policy – will prove fundamental to the future of the UK housing market.”

Alan Cleary, managing director, mortgages at OneSavings Bank, said: “It’s no surprise that market activity is down on 2019 transactions, but it’s encouraging to see a significant uptick since the easing of lockdown.

“With the market experiencing its busiest month for enquiries in more than 10 years in July, according to Rightmove, as a result of pent up demand and the government stimulus on stamp duty we should see an improvement in transaction levels in months to come.

“First time buyers, homeowners and landlords wishing to take advantage of the stamp duty relaxation should move sooner rather than later to ensure they don’t miss the deadline.”

By Jessica Bird

Source: Mortgage Introducer

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Residential property transactions jump 32% in June – HMRC

Residential property transactions in June increased 32% month-on-month to 63,250 transactions, HMRC figures show.

However, this is still far below the transaction levels seen in the same month last year. Year on year, transactions were 36% lower than June 2019.

Non-residential transactions rose 31% to 7,340 in June but annually, this was represented a 27% decline on the same month last year.

Market position to be seen in months

Andrew Southern, chairman of Southern Grove, said: “The annual decline isn’t particularly flattering but it’s the trajectory that’s most important. The next few months are going to make June look like an amuse-bouche rather than an entrée.

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“A healthy improvement in volumes month-on-month points to a large proportion of agreed sales that were knocked back, due to the pandemic, finally reaching completion.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “Whilst the transactions figures have not improved significantly since May, the nature of the property market means people have not had enough time to get through the moving process.

“It will take a bit longer for us to see how much new activity there has been in the market since it reopened in May.”

Stamp duty concerns

Mike Scott, chief property analyst at Yopa, said the recent stamp duty holiday in England and Northern Ireland, as well as similar initiatives in Scotland and Wales would help bring some transactions forward to this year but suggested this would not have a lasting impact.

“After a spike in the number of completions in March 2021 there will probably be another fall in the second quarter of next year as the normal rate of stamp duty is reimposed,” he said.

Tomer Aboody, director of MT Finance, also agreed the tax break had a positive effect on the market but said changes to capital gains tax could set that back.

Aboody said: “If the government increases capital gains tax on principal home sales, it will push us back again so any progress made by the stamp duty reduction will be swiftly lost.

“We need more stimulus via reduced stamp duty to the upper end of the market and hope for this in the Autumn Budget.”

Written by: Shekina Tuahene

Source: Your Money

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New builds will drive residential property market revival

As the residential property market reopens it will be new builds that drive the market and lead its revival.

Here are six reasons why:

Resi Revival 1 – off-plan take off
Many new build sales are agreed off-plan with buyers not always viewing the physical property they are buying, perhaps relying on a visit to a show home before the lockdown, online brochures, virtual models, computerised images and other technology.

Resi Revival 2 – phased release
New build developments are often highly anticipated, with interested buyers’ already having decided on their preferred scheme. They will have done their research early in the year on the area on pricing and house types and will be ready to go.

Resi Revival 3 – mortgage valuations
New build mortgage valuations are not necessarily based on the finished home as it will still be under construction, but on comparable homes and market data. This means buyers will have mortgage offers ready to go, speeding up the sale process.

Resi Revival 4 – move-in ready
Completion on a new build property has the added benefit that no one has lived at the property leaving less cause for concern on COVID-19 contamination and the need for deep cleaning, giving buyers, and particularly those with children, peace of mind.

Resi Revival 5 – rental investors
New build properties are attractive as rental units as they require little to zero finishing work before tenants can move in and are low maintenance to look after.

Overseas investors are likely to play a key role on driving sales and injecting cash into the property market.

Resi Revival 6 – Help to Buy mark 2.
The existing Help to Buy scheme is due to end in March 2021 and will be replaced with the new scheme available only to first-time buyers.

There is still time for deals to be agreed with Help to Buy finance under the current scheme, with FTBs secure that help will be there when it is needed.

By Beth Heley

Source: Mortgage Introducer

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Buy To Let Property Investors Enjoying The Cambridge Effect

The residential property market in Cambridgeshire is performing well, impacted by the ‘global brand’ of Cambridge and the diversity of its market trends.

Research by property consultants Bidwells has found that Cambridge and the surrounding county has seen its residential property market rise three times quicker than the UK national average.

In the next 20 years, population growth in the Cambridge area is expected to be 24.5 per cent, placing pressures on demand on the city. Additional factors contributing to the success of the rental market are Brexit, high performing schools, improved transport links and the significant increase in housing throughout Cambridgeshire.

Rental costs have increased by approximately 3 per cent in the last 12 months with an average rent of just over £1250pcm in Cambridge. The strength of migration into Cambridge provides one of the key drivers of the residential lettings market.

One of the main reasons of this influx is due to the expansion of the Biomedical Campus where the total jobs on site at present are circa 12,300 with 7,500 to be created for the coming year, providing a total of 19,800 employees eventually on site.

It is not only the current influx of AstraZeneca employees that is significant but also other large companies and institutions such as Cambridge University, ARM and Addenbrookes Hospital, that have under-pinned the lettings market for many years now and will continue to do so in future. More recently companies such as Amazon, Microsoft Research and Apple to name a few, have joined the expanding technological highway of silicone fen.

Brexit, and the general uncertainty towards house values has meant that many people are opting to rent, boosting demand in the private rental sector.

Secondly, the number of high performing schools and colleges with a world leading university continues to attract many people wishing to live and work in Cambridge. Vitally, 64 per cent of residents in the area said that living within walking distance to a school was very important to them.

The confirmation of a Cambridge South Train Station opening next year highlights that Cambridge is an ideal location for London commuters too.

Source: Residential Landlord

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68% of brokers think Base Rate had no impact on their businesses

More than two thirds (68%) believe that the two Bank of England Base Rate increases seen since November 2017 had no impact on their business, United Trust Bank’s broker sentiment survey has found.

The Base Rate currently stands at 0.75% following an increase from 0.50% on 2 of August this year.  The rate was increased from 0.25% to 0.50% on the 2nd of November 2017.

Some 16% of brokers felt the two increases had had a positive impact on their businesses as opposed to 16% who felt they had had a negative impact.

Harley Kagan, group managing director – United Trust Bank, said: “It is encouraging to see that for a majority of brokers the two Base Rate increases have had little to no impact on their businesses over the last 12 months.

“I believe the same is broadly true from a lender perspective although expectations of higher mortgage rates to come may have been a contributing factor to a general cooling of activity in the residential property market.

“Developers and housebuilders need to be mindful of future demand and pressure on pricing when planning future projects and that, coupled with Brexit uncertainty, is causing some to take their foot off the gas with new starts.

“The Base Rate has been less than 1.0% for the best part of 10 years. Originally a measure to stave off the worst effects of the financial crisis, for many, and especially the latest generation of consumers and borrowers, ultra-low interest rates are now the norm.”

Kagan added: “As such it doesn’t take much of an increase to inject some nervousness into the market, especially for first-time buyers.

“However, a return to the interest rates seen before the credit crunch seems unlikely. Whilst a 5% Base Rate appeared reasonable in 2008, the PRA recently challenged the resilience of banks and other lenders using a 4% Base Rate for stress testing, an indication perhaps of what they believe would be an extraordinary interest rate for the current economic environment.

“Hopefully, once the nature of our future relationship with the EU is clearer and uncertainty in the economy is replaced with stability, buyers will be back in even greater numbers and housebuilders will be more encouraged to get on with tackling the UK’s inherent housing shortage.”

However, when asked what impact the increases have had on the UK’s residential property market over the last 12 months, 27% believed the effect had been negative.

Nearly half (46%) expected one more increase of 0.25% between now and the end of 2019, taking the Base Rate to 1.0%, while 12% expected the rate to fall.

Source: Mortgage Introducer