"This is welcoming news for the government. So far, the stamp duty holiday has proven a success in releasing pent-up demand. Buyers are flocking to the market, and this is driving house prices higher."
The provisional non-seasonally adjusted estimate of UK residential transactions in August is 84,910, 23.9% lower than August 2019 and 6.1% higher than July 2020.
Jamie Johnson, CEO of FJP Investment, commented: “This is welcoming news for the government. So far, the stamp duty holiday has proven a success in releasing pent-up demand. Buyers are flocking to the market, and this is driving house prices higher.
“The findings come at an interesting time. Confidence may be running high, but with the recent spike in Covid cases, the question now is whether the re-introduction of lockdown measures will dampen buyer appetite. While there is clear demand for property, a sudden change in circumstances could once again result in buyers temporarily retreating from the market.
“A recent survey by FJP Investment revealed that 42% of investors want the government to offer additional support to homebuyers and property investors beyond the stamp duty holiday. Now could be the right time to consider new policies if the government wants to maintain steady transaction numbers over the coming months.”
Anna Clare Harper, CEO of asset manager SPI Capital, added: "The increase in transactions reflects the release of pent-up demand and supply, the impact of the temporary stamp duty change, and the wide availability of capital, with low interest rates and effective quantitative easing via government stimulus.
"It’s worth noting that transactions were significantly down (-23.9%) compared with August 2019 data, with year to date transactions down from c. 500,000 to c. 300,000.
"The data is buoyed up by home buyers seeking houses to live in, for the most part. By contrast, investor sentiment is - for the time being - more measured. Institutional investors in particular tend to be nervous about the future in times of change, leaving the way open for private investors to snap up deals.
"What happens next will be defined by two major factors: economic confidence and policy. With the prospect of further change to come, for example, in the form of Capital Gains Tax reform and through Brexit, it is an exciting time in the property market. For investors, it is becoming increasingly important to understand both the bigger picture and local variations."
