The UK housing market exhibited positive growth through June and July as new data demonstrates heightened activity across the UK. Key drivers underpinning this uplift in transactions include the stamp duty holiday, a surge in rental stock, and lenders gradually beginning to return to the sector hence buoying access to mortgage borrowing.
Indicators point to multiple facets of the sector strengthening. In the private rental space ARLA (Association of Residential Letting Agents) June figures report that the number of properties managed per letting branch reached a high of 200, whilst registering 79 tenants per branch. Relative to an average of 70 tenants in May, and 71 in June last year, this signifies resurgent demand as the rental market recovers post lockdown.
Moreover, homeowners benefitted from annual price growth recovery of 1.5 per cent in July, imputing growth of £4,533 in value, given that average house prices in July were £220,936 according to Nationwide data. The residential transactions report in July showed that, on a seasonally adjusted basis, the number of homes sold in the UK in June grew by 31.7 per cent from the May figures, to 63,250 property deals completed.
Finally, the Chancellor’s announcement on 8th July of a stamp duty holiday is providing further support to the housing sector. Prior to this legislative amendment, homebuyers would start paying stamp duty above a £125,000 threshold at 2 per cent till £250,000 and 5 per cent above this up to £925,000. However, until 31st March 2021, this Stamp Duty Land Tax threshold has been increased to £500,000 - meaning that approximately 90 per cent of owner-occupier transactions in England will pay no stamp duty, and those paying in excess of this threshold will pay £15,000 maximum.
From first-time buyers to second-steppers, to those looking to downsize this will have a tremendous impact. For instance, Rightmove reports that agent enquiries for homes in the £400,000 to £500,000 range have increased by 49 per cent since the stamp duty changes were administered. Buy-to-let investors and those buying second homes are still required to pay per cent, even below the £500,000 level, but also save money.
The record-breaking supply of rental stock and demand from tenants for this time of year paints an optimistic picture for the summer months, indicating that the market will be more active than the usual seasonal lull. As the market continues to recover from the pandemic, it’s essential that everyone continues to keep up with their rent in order to sustain the market and help boost the economy during these uncertain times, says ARLA.