U.K. Tax Break Pushes Housing Sales to Highest in a Decade
The U.K. housing market saw a surge in activity last month after a government tax break pushed sales to the highest in more than a decade, according to Rightmove.
The property website said the number of agreed sales jumped in July, with the value hitting 37 billion pounds ($48 billion). That’s the most since Rightmove began tracking the data over 10 years ago. Prices rose at their fastest annual rate since the aftermath of the 2016 Brexit referendum.
The suspension of the stamp duty tax on home sales is having a huge effect on activity following the slump during the coronavirus lockdown. It’s meant the market isn’t experiencing the usual summer slowdown.
The Rightmove report also suggests a shift in buying patterns since the pandemic. The prospect of long-term remote working and fresh fears of virus resurgence have led people to move out to countryside areas like Devon and Cornwall, both of which saw record-high sales in July.
Rightmove director Miles Shipside said there’s been an “out-of-city exodus,” because “working from home means a different lifestyle much closer to your new doorstep.”
The stampede out of cities could get even stronger in the coming months as almost two-thirds of British businesses expect all or some of their employees to work remotely for the next year.
“There’s an added layer of additional demand due to people’s changed housing priorities after the experience of lockdown,” Shipside said. “This is also keeping up the momentum of the unexpected mini boom, which is now going longer and faster.”
However, the good times for the market may not last long with the economy now in recession and unemployment expected to rise. Many British real estate agents expect demand for new houses to fall beyond the next three months, according to the Royal Institution of Chartered Surveyors last week.
©2020 Bloomberg L.P.