The HMRC Property Transaction Statistics report for July found that UK residential transactions had seen a 14.5% uptick month-on-month in July.
This is only likely to improve further, even in the face of continued uncertainty, as these figures do not yet show the impact of measures such as the stamp duty holiday, according to Just Mortgages.
John Phillips, national operations director at Just Mortgages, said: “Demand has come flooding back to the market since lockdown and a lot of our brokers are reporting that they are busier than ever.
Pent up demand sees residential transactions increase in July
“People who were thinking about a move before lockdown have been joined by others who are looking for somewhere new to meet changing requirements.
“There are some clouds on the horizon too: as the furlough scheme unwinds, it is likely we will see unemployment rise, and it remains to be seen how long the economic downturn will last.
“But the stamp duty relaxation is a welcome boost, and that won’t yet be showing through in these figures.
“And lenders are beginning to show some movement on bringing back higher-[loan-to-value (LTV)] products, which should help first-time buyers.
“One thing we can be pretty certain of is that, barring a second wave of coronavirus and a further lockdown, the second half of 2020 will be better than the first.
“July’s figures are a promising start to that.”
Jonathan Sealey, CEO at Hope Capital, agreed that the data showed the start of recovery, and that stamp duty changes would have a further positive impact.
He said: “The 14.5% increase in transactions from June to July is further evidence that the market is continuing to recover strongly from lockdown.
“These figures will not yet show the full effect of the stamp duty holiday, so we’d expect to see this bolstered further as we move into autumn.”
The positive overall trajectory of the market has been reflected within Hope Capital’s own business, Sealey added.
He said: “Although there’s clearly a long way to go for the market as a whole to get back to where it was, at Hope Capital we are seeing stunning levels of inquiries, way up on last year.
“COVID-19 has created changing patterns of demand, as people adapt to a slightly different lifestyle, with less commuting and more working at home.
“This is also likely to feed through into increased transaction volumes, with many people considering a move away from large towns and cities.
“As the recovery unfolds, we’re expecting to see a lot of demand from buy-to-let landlords, taking advantage of the stamp duty cut to expand their portfolio and provide rented housing that meets people’s desire for somewhere quiet to work at home, and better access to the great outdoors.”
Others noted that the July transaction uptick showed the scale of pent-up demand that built during lockdown.
James Anderson, operations director at MT Finance, said: ’These figures reflect how extremely active the property market was in July and are hugely encouraging, particularly as the stamp duty holiday has not yet been reflected in the official numbers.
“During lockdown we saw transactions fall to below the level of the financial crisis of 2008, which was no surprise as it was impossible for life to continue as ’normal’ but we are now seeing pent-up demand from that period confirmed in the sales volumes.”
Anderson added that this demand would need to be supported in order to translate a transaction uptick into a healthy market down the line.
He said: “What we need for the next phase of recovery is further government support through policies such as the stamp duty holiday to ensure this bounce back translates to sustained demand for the rest of this year and into next.”
These figures follow shortly after HM Land Registry resumed its House Price Index, publishing the data for April 2020.
Jeremy Leaf, North London estate agent and a former residential chairman of the Royal Institute of Chartered Surveyors (RICS), said: “Transactions are a better measure of market strength than more volatile property prices.
“Although these numbers are a little dated because there is an inevitable time lag between when a sale is agreed and completion, they show buyers were emerging from lockdown and taking advantage of continuing low interest rates even before the stamp duty holiday was announced.
“The figures demonstrate how resilient the market was and reflects what we were seeing, losing few transactions unless of course buyer or seller was working in the corporate hospitality or travel business.
“Looking forward, future results are only likely to be stronger as they will take account of the even more significant upsurge in activity we have seen on the ground since July.”