Research by leading estate agent, Benham and Reeves, has revealed that while the anti-work from home movement has been building amongst homebuyers across major cities in England, the original stamp duty holiday deadline saw transactions decline by -51% across England during Q1 of this year.
Benham and Reeves analysed residential property transactions across England and five major cities and found that momentum has been returning to the market since the second quarter of last year.
In the wake of industry lockdown restrictions, 107,491 transactions were registered across England in the second quarter of 2020, then climbing by 65% to 177,498 in the third quarter. The market surrounding Newcastle saw the biggest rebound, with a 75% increase in transactions in Tyne a Wear between Q2 and Q3.
London saw the second largest uplift at 68%, followed by Greater Manchester (61%), Merseyside (59%) and then Birmingham (46%).
Both the wider market and these major cities continued to see transaction levels climb between the third and final quarters of last year, with a 29% uplift quarter to quarter across England as a whole.
However, following the Christmas period and with the initial March stamp duty deadline approaching, the market saw a notable retraction during the first quarter of 2021 where the number of transactions is concerned.
During Q1, 112,450 transactions took place across England, a -51% reduction on the previous quarter although still marginally higher than Q2, 2020.
Liverpool and the Merseyside area saw the largest reduction of the major cities analysed, with transactions down -57% on the previous quarter. Newcastle also saw a decline of -56%, followed by Greater Manchester (-54%), Birmingham (-52%) and then London (-45%).
Director of Benham and Reeves, Marc von Grundherr, commented: “Despite much being made about the working from home trend causing a mass exodus of homebuyers from our major cities, this simply doesn’t seem to have been the case as transaction levels have been climbing at a considerable rate throughout last year.
However, it seems as though the original stamp duty deadline had a major influence on this level of market activity with transactions down by half during the first quarter of this year compared to the final quarter of 2020.
With a staggered deadline in place and further incentives in the form of 95% mortgage products and a rehash of the Help to Buy scheme, it’s unclear as to what extent the market will react to the impending stamp duty deadline and the extended deadline due in September.
Although a natural correction is no doubt on the cards, this tapered approach should help reduce any major negative impact. In addition, with many of us now returning to work a further boost to buyer demand across our major cities should go some way in mitigating any decline in these areas of the market, at the very least.”