June 2021 was the busiest month ever for UK estate agents, home removal companies and conveyancers since monthly records began, as HMRC logged 213,120 residential transactions in June, a jump of more than 216% nationally on the same month last year (when the housing market had just reopened after the initial lockdown).
The cause of this was all the homebuyers trying to complete their property purchases before the approaching Stamp Duty Holiday deadline finished at the end of June. This was important as house buyers had until 30th June to complete their sale to save up to £15,000 in Stamp Duty Tax.
Many property market commentators believed the property market would slump after the Stamp Duty Holiday finished. Yet, I haven’t observed many property sales falling through or renegotiations because the buyer had to pay the extra Stamp Duty, and talking to other property professionals around the UK, neither have they.
Let’s not forget that the Stamp Duty Holiday isn’t totally over as it is tapering off until 30th September. This means homes and apartments sold under £250,000 will still profit from the Stamp Duty Holiday.
So, what sort of property transaction numbers are we talking about here in York?
An average of 232 properties a month in the York area have sold in the last 12 months, compared to the 10-year rolling average of 359 properties sold per month.
The best month ever before this June was March 2016, when there was a rush by York buy-to-let landlords to secure a property before the introduction of a 3% Stamp Duty surcharge for second homes. In March 2016, 753 York properties changed hands.
My calculations show 936 York households sold in June 2021, 160.7% more than the long-term average.
So, what has driven this? The Stamp Duty changes caused some York people to bring their home moves forward from 2022/3 to take advantage of the tax savings. Yet the most significant thing, talking to many York homebuyers and sellers, is the pandemic has changed the way people live. Working from home and needing additional office space has meant many York families (and others from out of the area) are seeking larger properties with more extensive gardens and better access to the countryside. I really can’t see this social trend changing for a long time. I believe this means York property prices in the medium term will not be markedly different over the next couple of years yet …
Don’t be alarmed to see volatile short-term changes on the run-up to Christmas (both up and down) with York house prices.
I have always been a believer in the medium-term (i.e. over a couple of years) house price trends instead of the monthly trends, which can sometimes be like a yo-yo. I have always said the best bellwether to the health of the York property market is the number of property transactions rather than the house prices.
Finally, I can only see this continuing as banks scrabble to give money away in the form of cheap mortgages. A few weeks ago HSBC and TSB launched a 0.94% two-year fixed rate deal for those wishing to borrow 60% or less. More recently, the Nationwide Building Society launched a 0.99% five-year fixed-rate mortgage deal (again on a maximum of 60% loan to value basis).
If you would like a chat about the York property market, your options and where you stand in the York property market – please do not hesitate to give me a call.
In the meantime, I would love your thoughts on this.
Has the pandemic made you move home earlier?
What do you think will happen in the coming years to property in York? share your views.