More than 100,000 additional house sales are expected during the first three months of 2021, as the rebound in the property market continues and buyers rush to complete their purchases before the end of the stamp duty holiday.
The number of new sales being agreed remains 38% higher than it was a year ago, according to property website Zoopla. It predicts the housing market will be the busiest before Christmas than it has been for over a decade.
The UK housing market has rebounded since the summer because of pent-up demand following the first UK-wide lockdown, and after the chancellor, Rishi Sunak, decided in July to introduce a stamp duty holiday on properties up to £500,000 until March 2021.
The boom in property sales since the summer has been felt most strongly in London and southern England, where 7% more sales were recorded than in the previous year.
The flurry of interest from potential buyers has pushed up house prices by 3.5%, the highest level of growth for almost three years, and is set to increase further by the end of 2020.
Video: Existing home sales rise to highest since February 2006 (CNBC)
The housing market has had a “remarkable turnaround” since the spring, said Richard Donnell, director of research and insight at Zoopla.
“It has been a rollercoaster year for the housing market which is ending on a strong note with demand and sales agreed still more than 30% higher than this time last year,” Donnell said.
Continued interest from homebuyers caused residential property transactions to surge by almost 10% in October, compared with a month earlier.
More than 105,000 residential transactions took place last month, an increase of nearly 10% compared with September, and 8.1% higher than October 2019, according to figures from HMRC.
“There haven’t been more transactions than this in a single month since March 2016, and even that was a very unusual spike created by tax changes for landlords,” said Andrew Southern, chairman of property developer Southern Grove.
“The pandemic and a raft of measures to support the economy have delivered record house prices and, finally, a head-turning recovery in sales volumes.”
A last-minute surge of prospective buyers is expected in January, as purchasers try to beat the deadline for the stamp duty holiday. However Zoopla said that only half of deals agreed that month will likely complete before the March deadline for the end of the stamp duty holiday.
Homebuyers have been warned that high demand for mortgages and coronavirus restrictions are creating delays in the process. The number of mortgage approvals hit their highest level since before the financial crisis in September. Figures from the Bank of England showed almost 85,000 loans to fund a house purchase were approved in August alone.