House sales ‘highest on record’ in February

Housing sales in February surged as home buyers rushed to meet the original end-of-March deadline to pay less stamp duty, according to government figures.

Figures released by HM Revenue & Customs yesterday showed that there were 147,050 residential property sales in February, 47% up on the same month in 2020.

The data said the seasonally adjusted figure was 23% above the already high number for January, with analysts suggesting the property market in 2021 could be on course for the largest number of sales in any year since the credit crunch.

HMRC said the spike in transactions – to the highest February total since the data was first collected in 2005 – reflected activity designed to complete transactions in time for the original end of Rishi Sunak’s temporary stamp duty holiday, which falls on 31 March.

In the event, the chancellor used his Budget at the start of the month to extend the deadline to 30 June for properties below £500k, and to the end of September for properties cheaper than £250k.

The rise in February follows a small decline in January.

Lucian Cook, head of residential research at Savills said the “strong surge in transactions” meant the firm now expected to see around 1.4 million housing transactions this year, compared to a post credit crunch norm of 1.2 million.

He said: “There is growing evidence that the extension of the stamp duty holiday, together with the roll-out of the vaccine and progressive easing of social distancing, is likely to support continued strong activity over coming months and potentially into the autumn market.

He added that it was also a “salutary reminder” of how pre-announced stamp duty measures distorted market behaviour.

Tom Bill, head of UK residential research at Knight Frank, said the spike in transactions in February was “predictable” ahead of the March stamp duty deadline. He said: “What is more surprising is that transaction numbers in the year to February were only down by 6%.

”To put that in context, the property market was shut for 15% of the year. One year on from the first national lockdown, the figures demonstrate the extent to which the housing market has recovered and shown its resilience through the pandemic.”