House sales boost expected in early 2021 as stamp duty deadline approaches

PA

Around 100,000 “additional” house sales are predicted to take place in early 2021, as strong activity spills over into the new year.

A stamp duty holiday, which temporarily raised the nil rate band of the tax to £500,000, is due to end on March 31 2021.

Zoopla said this year could see the strongest run-up to Christmas in terms of house sales for over a decade as buyers look to beat the deadline.

It then anticipates a further demand spike in January 2021 as some buyers leave it late to enter the market to try and make a stamp-duty saving.

It predicts sales across next year will reach 1.1 million – with around 100,000 more transactions taking place in the first quarter of 2021 than in the first three months of 2020.

Of the new sales agreed in January, the property website estimates just half are likely to beat the stamp duty deadline, based on evidence from previous years.

Richard Donnell, director of research and insight at Zoopla said: “The high volume of sales agreed this autumn will spill over as completed sales in 2021.”

After the March stamp duty deadline, Zoopla anticipates a slowdown in sales.

It said this will have a knock-on effect on transactions in the second quarter of 2021, which it expects to run 20% to 30% below normal levels, before recovering slightly for the second half of the year.

Across the UK, house price growth is also expected to be weaker next year. Property values are predicted to be 1% higher by the end of 2021, compared with 4% growth expected across 2020.

Zoopla expects house price growth in 2021 to fall within a narrow range, from 1.75% in Scotland to 0.5% in the East and North East of England.

Harry Buchanan, director of Jackson-Stops’ Pimlico and Westminster branch in London, said: “January is traditionally a busy time for agents, with buyers and sellers alike taking the festive period to plan for the year ahead.

“However, we’re expecting the first quarter of 2021 to be exceptionally active as buyers try to squeeze in their deals before March 31.

“Those looking to make savings on the stamp duty holiday will get in by a whisker if they leave it late to make an offer, we are advising any serious house hunters to have their offers in by January at the very latest.”

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