Savills has boosted its forecast for housing transactions this year because the stamp duty holiday has been such a success at encouraging buyers.
The agency now expects 2020 transactions to total around 1.06m, up from 775,000 originally forecast as the country emerged from lockdown and prior to the stamp duty holiday announcement.
But the agency says that given possible delays in completing sales agreed this year, plus the rush to beat the end of the stamp duty holiday in March, completed transactions are also likely to boost 2021 - they should reach over 1.2m next year despite what the agency calls “weaker underlying market conditions.”
Savills has increased its prediction after seeing data from property consultancy TwentyCi which suggests the total number of sales agreed in 2020 to the end of August exceeded those in the same eight months last year, despite the period of lockdown. Indications are that September will be another strong month for sales agreed, though this will take time to feed into completed sales.
“High activity levels reflect a combination of factors” says Savills’ research chief, Lucian Cook. “A release of pent up demand during lockdown, much greater commitment from buyers who’d been cautious about trading up the housing ladder in the period since the EU referendum, and demand from those making bigger lifestyle changes given their experience of lockdown, are all playing a role.”
But, Savills notes, the economic backdrop and constraints on new borrowers, means conditions favour most those people with equity, creating a market dominated by mortgaged home movers and cash buyers.
This may not be the agency’s final word on transactions or the market, as Cook issues a caveat: “The pace of economic recovery and the government’s policy response, together with the progression of Covid-19 and the search for a vaccine, mean the outlook for the housing market will inevitably continue to change.”