"Transactions are now being encouraged by the temporary stamp duty reduction, the release of pent-up demand and supply, and the desire to improve surroundings following lockdown."
On a non-seasonally adjusted basis, the number of residential transactions is 13.7% higher than October 2019 and 23.7% higher than September.
Richard Pike, sales and marketing director at Phoebus Software, commented: “We have now reached a point where the impetus created by the stamp duty payment holiday has taken property transactions above the level in the same month last year. However, as can be seen by the increase in the receipts from the stamp duty that is still being paid on properties over £500,000, house prices are being pushed up by the demand. The question has to be whether the increase in house prices is sustainable, or even affordable. With the government wanting to get more people onto the property ladder, it appears that what we are creating is a false ceiling that many younger people will once again struggle to break through.
“Affordability, especially when many incomes are suffering due to the pandemic, is a big issue, which could see the housing market stall once the stamp duty holiday is over.”
“The Chancellor’s spending review tomorrow is unlikely to include anything further on housing, but stranger things have happened and, when receipts for stamp duty continue to flood into the treasury, an extension to the payment holiday may be on the cards. Whether that is good for the long term health of the market is another question?”
Joshua Elash, director of MT Finance, said: "The continued growth in volume of residential transactions is breathtaking. October’s data no longer merely reflects pent-up demand but points directly to the impact of the stamp duty concession. It looks and feels as though there is a rush to take advantage of this opportunity, which is driving continued growth in transactional volumes.
"The obvious concern is what happens to demand and transactional volumes if, and when, the stamp duty holiday ends. Without an extension, we risk seeing a violent drop in activity, leading to a fall in asset values.
"It is no surprise to see that non-residential transactions are down year-on-year, with Covid hitting commercial assets particularly hard as more businesses struggle to survive. We expect this trend to accelerate."
Anna Clare Harper, CEO of asset manager SPI Capital, added: "The increase in residential property transactions - 8.1% up compared to October 2019 and 9.8% up compared to September 2020 - reflects positive forces that are applying uniquely to the housing market at this time.
"In April and May, under strict lockdown, transactions were down by about 50% compared with the same time the previous year.
"Transactions are now being encouraged by the temporary stamp duty reduction, the release of pent-up demand and supply, and the desire to improve surroundings following lockdown. By contrast, non-residential transactions have remained subdued - as owners and buyers struggle to come to grips with the ‘new normal’.
"What is clear from the residential transactions data is that the fundamental drivers of value in residential property remain strong: our homes have never been so important as in lockdown.
"So what next? What we know for sure is that this will be driven by a combination of macroeconomic factors and policy changes, neither of which are predictable in these uncertain, fast-changing times."
