Covid causes 41% drop in sales despite stamp duty holiday – study

Residential transactions across England and Wales fell by 41% in 2020 when compared to the previous year despite a boost in the market from the stamp duty holiday, GetAgent has revealed.

The initial lockdown in March last year saw the property market ground to halt, but its reopening and the introduction of a stamp duty holiday helped restore it back to good health.

This is underpinned by a 3.5% increase in the average sold price of homes in 2020 compared to 2019, which took it to £238,000 based on GetAgent’s analysis of Land Registry sold price records.

However, while prices have climbed, Covid has left its mark where the actual number of homes sold is concerned. According to the research, 936,822 residential transactions took place in 2019, falling to just 552,145 in 2020.

Lowest total transactions

The City of London saw the lowest number of overall transactions, with just 80 sales taking place. Rutland also saw a low level of overall transactions at 746, as did Richmondshire (453), Merthyr Tydfil (458) and Oadby and Wigston (881).

Biggest year-on-year declines

Buckinghamshire has seen the largest decline in overall market activity. According to the Land Registry’s record of transactions, the area saw just 1,705 homes sold in 2020, an 80% drop on the 8,304 sold in 2019.

Newham saw the second largest decline in property sales and the largest in London. Just 1,308 transactions completed across the borough last year, a 59% drop on the 3,173 transactions seen in the previous year.

Salford (-57%), Corby (-53%), Selby (-53%), Cardiff (-51%), Rutland, South Derbyshire and Vale of Glamorgan (-50%) also saw transaction levels fall by 50% or more when compared 2019.

Colby Short, founder and chief executive officer of GetAgent, says although the market has rebounded from the depths of lockdown restrictions at the start of 2020, this is only true to an extent.

“The reopening of the market and the introduction of a stamp duty holiday added serious fuel to the fire, causing property values to climb as a result,” he explains. “However, the downside of such overwhelming demand is that many of these transactions became jammed in the hopper of the home selling process, largely due to the lethargic nature of the backend legal process of selling in England and Wales.”

Short says as a result, many of these transactions are still waiting to complete many months after an offer was formerly accepted.

“When you couple this logjam with the initial property industry paralysis caused by Covid and the ensuing lockdown restrictions, the market has actually seen quite a notable decline in transactions when compared to 2019,” he concludes.