Stamp Duty Land Tax Data for Q1 reveals frenzied demand in housing market

Facade of Georgian residential town houses made in yellow and red brick in a luxury residential area of West London.

Today the HMRC released the Stamp Duty Land Tax (SDLT) data from Q1 of 2021, showing a dramatic 48% increase of transactions compared to Q1 2020. The total SDLT transactions in Q1 2021 were only +1% higher to those in Q4 2020.

Government propping up demand in 2020 and in the recent budget, through stamp duty holidays and the reintroduction of 95% LTV Mortgages will doubtless had an effect on the steady demand over Q4 2020 to Q1 2021.

Residential property transactions in Q1 2021 were 2% higher than in Q4 2020 and 53% higher than in Q1 2020. While non-residential property transactions in Q1 2021 was 7% lower than in Q4 2020 and 6% higher than in Q1 2020.

Cloe Atkinson, managing director, Mortgage Engine, comments, “Today’s figures show once again just how frenzied activity in the housing market is. The release of pent-up demand for property has been super-charged by the Stamp Duty holiday extension. The tax holiday has certainly been a success by any metric and current activity levels are further proof of the resilience of brokers, lenders and borrowers alike. Over the last year, the virus has forced the industry to re-shape the way consumers buy property and led to a great deal of adaption and innovation to overcome the difficult conditions caused by the pandemic.

“Technology has been important for all parties in transitioning to this new way of completing purchases and the industry has seen a large increase in the use of tech solutions, such as remote viewings and automated valuation models. As the UK looks forward to the return of some pre-pandemic normality, tech-driven solutions will continue to be a vital part of the success of the mortgage market. A lot of progress has been achieved in the last year when it comes to tech adoption, but the industry needs to be ambitious and continue to build upon this momentum to provide better outcomes for its consumers.”

Commenting on UK house prices rebounding 7.1% in April, Tom Brown, Managing Director of Real Estate at Ingenious said, “Again we note the house price index reflects continued market resilience with buyers committing to purchasing despite macro-economic uncertainty. Whilst pricing is being supported by Government stimulus including the Furlough programme, SDLT relief and the promise of a return to 95% mortgages, the longstanding lack of supply in the mid-market will be major a factor in supporting house prices this year. Whilst we are expecting price increases to taper as the stimulus is gradually withdrawn, we don’t forecast a material drop in demand this year.”

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