The number of buyers looking for homes has surged in the month since the chancellor announced a stamp duty holiday, with demand for properties costing between £500,000 and £750,000 showing the biggest uptick, according to figures from the UK’s largest estate agency chain.
Between 8 July and 8 August, the number of people registering to buy across the country was up by 38% on the same period last year, boosted by the stamp duty holiday on properties costing up to £500,000, Hamptons International said.
The stamp duty cut, which was announced by Rishi Sunak as part of a package of measures to support jobs, means anyone spending more than £500,000 on a property is set to save £15,000 if they buy before 31 March next year.
The move only applied to sales in England and Northern Ireland, but was followed by changes in Wales and Scotland which increased the tax-free threshold in those parts of the UK to £250,000.
The housing market had already started to move after lockdown, but immediately after the chancellor made his statement, estate agents reported that phones were “ringing off the hook”, while property websites reported a rush of page views.
Hamptons International’s analysis of data from more than 700 branches owned by its parent company Countrywide suggests much of the initial flurry of interest has translated into serious property searches.
It found the number of buyers registering interest in properties costing £500,000 to £750,000 was up by 92% year on year, while on budgets between £750,000 and £1m the increase was 74%.
The increase in buyer interest was greatest in Scotland, where across all prices registrations were up by 77% annually. This was followed by the east of England, which recorded a 53% increase, and the south-east where would-be buyer numbers were up by 52%.
The figures bear out reports from other estate agents that many buyers are favouring homes outside cities, with registrations for properties in the countryside up by 49%. Towns and suburbs recorded a 43% rise, while demand for city homes was up by 20%.
The data showed that this rise in appetite from buyers has increased competition at the offer stage, with 30% of sellers receiving bids from three or more buyers, compared with 25% this time last year.
As a result, agreed prices as a percentage of asking price have hit a record high. Figures for England and Wales showed properties were typically selling for 98.6% of their asking price. In Yorkshire and the Humber, sales are being agreed at just over 100% of asking price, while in the north-east of England the figure is 96.5%.
Across the month, 21% of homes in England and Wales sold above their initial asking price, Hamptons International said, up from 17% during the same period last year. Scotland’s different property buying system meant it was excluded from the price-paid analysis.
Aneisha Beveridge, the head of research at Hamptons International, said the stamp duty holiday had boosted the market, but the impact of lockdown should also be considered as it could be driving demand for homes outside cities.
“The number of people looking to buy a home has risen across every region in Great Britain since the announcement, with southern areas recording the biggest increase,” she said. “It’s in these regions, where house prices tend to be higher, that buyers stand to gain the most from the holiday.”
She added: “With space topping buyers’ wish lists, demand for homes in the suburbs and country locations has increased the most, and it’s these homes that are most likely to sell above their asking price.
“Over the last decade house prices in cities have risen more than twice as much as those in the country, so this trend may mean the gap between city and country house prices will begin to close.”