HMRC state that the provisional non-seasonally adjusted estimate of UK residential transactions in October 2020 is 121,740, 13.7% higher than October 2019 and 23.7% higher than September 2020.
According to the figures, the provisional seasonally adjusted and non-seasonally adjusted UK residential transactions estimates have both increased in October 2020 compared to September 2020 and October 2019. These provisional increases for UK residential transactions in October 2020 have likely been impacted by the continued release of pent up demand within the property market since March 2020, alongside impacts from temporarily increased nil rate bands for SDLT, LBTT and LTT.
In April and May 2020, UK residential transactions decreased by around 50% compared to April and May 2019, caused by economic impacts relating to COVID-19 and public health measures introduced by UK governments in response. Following significant decreases in April and May 2020, UK residential transactions have since increased incrementally each month, reflecting the gradual easing of coronavirus public health restrictions for the property market and the introduction of residential transaction tax holidays within the various UK administrations.
Anna Clare Harper, CEO of asset manager SPI Capital, comments: "The increase in residential property transactions - 8.1% up compared to October 2019 and 9.8% up compared to September 2020 - reflects positive forces that are applying uniquely to the housing market at this time.
"In April and May, under strict lockdown, transactions were down by about 50% compared with the same time the previous year.
"Transactions are now being encouraged by the temporary stamp duty reduction, the release of pent-up demand and supply, and the desire to improve surroundings following lockdown. By contrast, non-residential transactions have remained subdued - as owners and buyers struggle to come to grips with the ‘new normal’.
"What is clear from the residential transactions data is that the fundamental drivers of value in residential property remain strong: our homes have never been so important as in lockdown.
"So what next? What we know for sure is that this will be driven by a combination of macroeconomic factors and policy changes, neither of which are predictable in these uncertain, fast-changing times."
Joshua Elash, director of property lender MT Finance, adds: "The continued growth in the volume of residential transactions is breathtaking. October’s data no longer merely reflects pent-up demand but points directly to the impact of the stamp duty concession. It looks and feels as though there is a rush to take advantage of this opportunity, which is driving continued growth in transactional volumes.
"The obvious concern is what happens to demand and transactional volumes if, and when, the stamp duty holiday ends. Without an extension, we risk seeing a violent drop in activity, leading to a fall in asset values.
"It is no surprise to see that non-residential transactions are down year-on-year, with Covid hitting commercial assets particularly hard as more businesses struggle to survive. We expect this trend to accelerate."
