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UK monthly property transactions tail off slightly in May

ended 22. June 2021

Monthly property transactions remained high in May

Though they tailed off slightly compared to April, monthly property transaction levels in May remained high due to the Stamp Duty holiday, according to data published this morning by the Office for National Statistics.

  • The provisional seasonally adjusted estimate of UK residential transactions in May 2021 is 114,940, 138.2% higher than May 2020 and 3.9% lower than April 2021.

Experts say other drivers of transaction levels are Government-backed mortgages at higher loan-to-values, pandemic-induced lifestyle shifts and a simple ‘FOMO’, or fear of missing out. People have been worried that house prices could spiral out of reach.

A selection of comments from property and mortgage market experts are available below.

9 responses from the Newspage community

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Imran Hussain
Director at Harmony Financial Services
"Unsurprisingly, the main driver of property transactions in May and the months leading up to it has been the the Stamp Duty holiday. Transaction levels in June and July are likely to reduce as the incentive for many has been removed but equally many people are now buying for pandemic-induced lifestyle reasons as much as the chance to save on Stamp Duty, so there will be no cliff-edge drop. More generally, I firmly believe that Stamp Duty should be scrapped. This will increase mobility for all within the property market."
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
"The Stamp Duty stampede, coupled with a rush of lenders offering high loan-to-value products and low rates, will have been key drivers of transaction levels in May. As for what happens next, demand for property continues to grow, the availability of homes for sale is diminishing by the day, and prices are skyrocketing as a result. Brokers and solicitors are pulling their hair out trying to manage people's expectations surrounding the Stamp Duty deadline."
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Corey Whelan
Director at Cambridgeshire Money
"Like fiscal dynamite, the Stamp Duty holiday has blown transaction levels and prices in the UK property market sky high. Another contributor to transaction volumes has been the growth in the number of 95% loan-to-value mortgages now available, meaning all rungs of the ladder have an incentive to get moving. I don't expect things to cool down down for a few more months yet."
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Lewis Shaw
Owner and Mortgage Expert at Shaw Financial Services
"Transactions in May were driven by a combination of the Stamp Duty holiday, increased availability of mortgages with historically low interest rates, a nationwide FOMO and the increased savings that people built up during all the lockdowns. One thing we have learned from the pandemic is not so much location, location, location, but rather space, space and more space, indoors and out. "The data is likely to be very healthy for June and July too as solicitors burst blood vessels trying to get anxious buyers over the line before they get trounced with the ending of the SDLT holiday. There's likely to be a big number of people that miss the deadline, and as it stands there's little that can be done about it. "Communication with conveyancers is so very difficult even though they seem to have had phones surgically attached to the side of their heads due to the mountain of transactions they're dealing with. Some mortgage lenders have already set deadlines for dates that funds must be requested by with one lender already having passed that date, meaning that even if a last minute dive for the line may be possible if those funds aren't ready there's almost nothing that can be done about it. "Advice for the people that are waiting to find out if they'll complete in time - hope for the best and prepare for the worst."
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
Unsuprisingly transactions were way up on last April when the nation was mid first lockdown and the housing market ground to a halt but down a bit on March when everyone thought they were working to a stamp duty deadline - that much is pretty obvious. But what of the future? Well there will likely be a stampede of people completing before the new end of June deadline meaning transactions this month will likely be higher again and then will settle in to a more normal pace from July onward. The moral of the story? Don't read too much into the month by month stats as they're warped at the moment by external factors creating strict deadlines and bottlenecks but expect these to disappear over the coming months and a proper picture of where the market sits develop.
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Aaron Strutt
Product and Communications Director at Trinity Financial
"Homebuyers have been desperate to get their purchases through and avoid paying Stamp duty. The biggest lenders still have billions of pounds worth of mortgages to complete. For many people there has never been a better time to secure a mortgage with sub-1% rates and more generous income multiples."
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Rob Gill
Managing Director at Altura Mortgage Finance
"The scramble to save up to £15,000 in cold hard cash has, unsurprisingly, injected pure rocket fuel into the market. Indeed, the Stamp Duty holiday has been the overwhelming driver of the property market since it was announced by Rishi Sunak last July."
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Ashley Thomas
Director at Magni Finance
"Without doubt, the Stamp Duty relief has driven the strong property transaction volumes. Overall, I would expect the next few months to drop off significantly. That said, for high value properties, we have seen an increase in enquiries from High Net Worth clients abroad. With the restrictions fully easing in the next few months, I think demand for prime property will continue to increase. The Stamp Duty relief doesn't make a significant difference for this demographic."
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Robert Payne
Director at Langley House Mortgages
"Opportunistic buyers have understandably dominated the market in response to Government support schemes, and this has of course tailed off as we draw closer to the June deadline. Despite this, volumes are still high as we see a shift in demand towards those buying cheaper properties, benefiting from reduced Stamp Duty relief until September and those who are still eligible for Government support such as first time buyers."