On 8 July 2020, Chancellor Rishi Sunak announced a Stamp Duty holiday on property transactions up to a threshold of £500,000 in England and Northern Ireland until 31 March 2021. While the intention of the Government was for the Stamp Duty holiday to sustain the increased demand seen in the housing market since reopening, is it working?
According to figures from TwentyCI, a property data and statistics provider, in the week following the announcement, it is interesting to note that some of the larger corporate estate agencies saw a decline in their weekly new instructions, with instructions once again increasing from the following week. While large corporates seemed to hit a speed bump in the road, smaller independent agencies saw a rapid increase in new instructions.
Iain McKenzie, CEO of The Guild of Property Professionals, a network of around 800 independent estate agencies, said: “Since the housing market reopened, our Members have been busier than ever with some saying they have never been as busy as they are now. Before the stamp duty announcement, The Guild was already leading the industry in the number of weekly new instructions, however, since the announcement, the number of new instructions pouring in has accelerated with the network listing over 2,700 new instructions each week. Last year, from 8 July to 22 July, The Guild network was listing around 1,800 new instructions a week, so we are seeing around 900 more instructions each week during 2020.”
When looking at the industry as a whole, new instruction numbers for 2020 overtook 2019 towards the beginning of June and have continued on an upward path, bar the slight dip after the stamp duty announcement. While fall throughs figures were higher this year than last at the end of May, by the beginning of July the number of fall throughs in 2020 had dropped below 2019 year-on-year figures.
While the number of instructions has increased and the number of fall throughs have decreased, what about sales agreed? McKenzie says that in the second week of June, Sold Subject to Contract (SSTC) numbers overtook figures seen in 2019 and have continued on a skyward trajectory. “In July 2019 there were around 25,000 SSTC a week across the industry. This year there are over 35,000 SSTC a week with the figure showing no signs of easing up,” he adds. “Looking at the data, independent estate agencies are also leading the charge in terms of SSTC numbers, with Guild Members agreeing sales on around 2,300 properties a week, up from approximately 1,500 in July last year. The closest corporate entity is at around 1,800 SSTC a week.”
McKenzie notes that while the impact of the furlough scheme coming to an end in October remain to be seen, the 2020 housing marketing is currently outpacing 2019 and is making up for time lost during lockdown. “There is still some uncertainty and hurdles to overcome, but based on the data coming through, the forecast for the housing market remains positive. Mortgage rates are extremely low which will help support higher prices and the stamp duty holiday will help maintain demand,” he concludes.