"It is unsurprising that the number of residential property transactions in the UK slowed somewhat in July given the tapering of the stamp duty holiday, but we do not believe this will last long."
This compares to the huge surge of demand that the HMRC reported in June this year as transactions more than doubled from June 2020.
Stuart Law, CEO of the Assetz group, said: “It is unsurprising that the number of residential property transactions in the UK slowed somewhat in July given the tapering of the stamp duty holiday, but we do not believe this will last long.
“With house prices expected to continue to climb by 8-10% this year and next, many would-be buyers will be driven to take the plunge sooner rather than later lest they be priced out of their dream home. Expectations that interest rates will stay low and continue to feed cheap mortgage deals will also fuel this movement and could help drive record levels of transaction activity as we approach the fourth quarter of the year.
“While of course it is helpful that house prices remained steady throughout the pandemic, it seems that long-term demand is here to stay as the stamp duty holiday winds down. We must, however, be aware of the issues facing the supply-side of the market at present as these are likely to continue to place upward pressure on house prices going forward.
“Rising material costs, labour shortages and logistical challenges caused by the intricacies of post-Brexit trade, as well as some pandemic-related factors, are all making it increasingly difficult for housebuilders to meet demand for new homes across the country. SME housebuilders in particular – who often have smaller teams and less available resources for the administrative elements of business – require greater support moving forward if we are to have a hope of achieving the Government’s target of building 300,000 new houses a year.
“Streamlined planning processes and improved access to much-needed funding would help alleviate some of the unnecessary burdens on such businesses in the near-term, enabling them to focus on meeting market demand over the longer term.”
Guy Gittins, CEO of Chestertons, commented: “The inflated market activity we have seen due to the Stamp Duty Holiday appears to have finally reached its peak after an unprecedented number of property sales during the first half of the year. Whilst the urgency has now come out of the market, we still have a record number of cumulative buyers remaining who are looking to buy. As a result, activity levels in July haven’t dropped as much as originally expected with the number of newly agreed sales being very close to May and June figures.
“Since the easing of lockdown restrictions, buyers have been eager to take control of their lives again and a big part of this is to find a property and location to call home. We predict that the introduction of attractive mortgage packages we have seen earlier this year will continue to boost the market, particularly since the Intermediary Mortgage Lenders Association has projected this year’s gross mortgage lending to reach £285 billion.”
