The number of house sales in the UK hit a new record high in June, according to official figures released by HM Revenue and Customs (HMRC). Here’s the full scoop, including how the frenzy of activity in the housing market may have influenced buyers’ choices.
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June house sales: what do the stats show?
House buyers flooded the UK housing market in June 2021, with property sales more than doubling from May.
According to HMRC, an estimated 213,120 sales were completed in June 2021. That is 108.5% higher than in May 2021 and 216.1% higher than in June 2020.
This makes June the month with the highest number of sales in the UK since they were first measured like this in 2005.
Why did house sales surge in June?
According to Sarah Coles, personal finance analyst at Hargreaves Lansdown, the increase in buying activity in June was primarily due to frantic buyers rushing to complete their purchases before the stamp duty holiday expired at the end of the month.
Under the stamp duty holiday, buyers didn’t pay stamp duty on the first £500,000 of any property purchased in England or Northern Ireland. Buyers could save as much as £15,000 when buying a house.
The temporary £500,000 threshold has been reduced to £250,000 until the end of September. After that, it will return to the standard £125,000.
What effect has buying activity had on house prices?
While buyers flocked to the market in June, sellers didn’t hit the market in the same kind of numbers. Recent data from Rightmove suggests that there is currently a 225,000 shortfall in the number of homes for sale. According to Coles, this has meant “panic buying, bidding wars and the return of gazumping”.
The ultimate result of the demand and supply imbalance has been a surge in house prices. Official figures from Nationwide show the biggest annual surge in 15 years.
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How has the frenzied market influenced buyers’ choices?
According to Sarah Coles, the kind of frenzied market we’ve been experiencing means that it’s easy to end up paying far more than the going rate.
“It’s easy to feel you don’t have any other choice, so you end up pushing your budget and over-stretching your finances,“ says Coles.
As a result, with time, buyer remorse could well set in, especially if the market happens to cool down. In fact, Coles notes that house prices are already showing signs of slowing.
It is not all doom and gloom, however. Coles says that even if you have overpaid and prices fall, if the home you bought is one you love, can afford and intend to live in for the long term, as long as you have a reasonable amount of equity in it, then it doesn’t matter what happens to its theoretical price down the road.
But if you paid more than you can afford, it’s best that you address the situation as soon as possible. According to Coles, it may be in your best interests to create a budget to identify areas where you can cut costs in order to afford your higher mortgage payments. This will help you keep on top of your finances and protect you from having to sell at the worst possible time.
