The number of properties sold soared by 15% during the month of February, as 96,250 homes changed hands, according to HMRC.
Key takeaways
- Almost 100,000 homes changed hands in February as the property market showed signs of an early spring bounce
- Home sales were 15% higher than in January but 20% lower than in February last year during the stamp duty holiday
- The rebound in sales indicates buyer demand remains high
Almost 100,000 homes changed hands in February as the property market showed signs of an early spring bounce.
A total of 96,250 properties were sold during the month, 15.3% more than in January.
But there was a sharp drop in activity compared with the same month of 2021, with property sales falling by 20.6% year-on-year.
The housing market was particularly busy in the first three months of 2021, as buyers rushed to complete purchases ahead of the planned end of the stamp duty holiday on 31 March, although the deadline was later extended until 30 June.
Despite the year-on-year drop, the number of sales completed in February was higher than those for the same month of 2019 and 2020, when market conditions were more normal.
Why is this happening?
The housing market typically slows down in December and January as people put moving plans on hold during Christmas, before rebounding during the spring.
The pandemic-induced search for space is also still leading to elevated buyer levels, with our latest House Price Index recording a 70% increase in people looking to move home, compared with the five year average.
Meanwhile, while there has finally been a slight rise in the number of homes listed for sale.
The elevated level of buyers, combined with more stock, is likely to have contributed to the increase in sales in February.
What does it mean for me?
The rebound in property sales is good news for anyone wanting to sell a home, as it indicates that demand not only remains strong, but that potential buyers are able to convert their interest into a purchase.
It is less good news is you are looking to buy a property, as it suggests the housing market remains fast paced with high levels of competition.
Despite the rise in the number of homes coming on to the market, there is also still a mismatch between supply and demand, which is continuing to push prices higher.
If you are looking to purchase a new home, you need to be prepared to move fast when you see somewhere you like.
You can register with us to receive alerts when something matching your criteria comes on to the market.
What’s the background?
While the housing market has remained busy during the early part of 2022, activity is expected to slow down as the year progresses.
The steep increase in the cost of living as a result of rising interest rates, and increases to food, energy and petrol prices, is likely to act as a brake on the market.
We predict house prices will end the year around 3% higher than they started, with growth expected to be strongest in areas of the country where property remains affordable.
The number of sales is also likely to slow, with an estimated 1.2 million properties expected to change hands during the year, down from 1.5 million in 2021 – the highest level since 2007.
The property market was exceptionally busy last year due to the combination of a once in a lifetime reassessment of housing needs following lockdowns, combined with the stamp duty holiday.
The number of transactions was so high, that stamp duty payments totalled £16.9 billion between April 2021 to February 2022 – £6.1 billion more than in the same period a year earlier, despite the stamp duty holiday.
