Momentum regaining as market rebalances

In the last week of June, exchanges were up a massive 204% compared to the five-year average, before dropping to just over 40% of the five-year average the following week, according to analysis from Tom Bill.

Although there will be a fall in transactions following the end of the full stamp duty holiday, pent-up demand will continue to underpin activity. Knight Frank saw a record number of offers accepted in the UK in June, which suggests transactional activity will remain strong throughout the summer, according to analysis from Chris Druce.

A lack of supply has frustrated buyers. The ratio of new prospective buyers to new instructions to sell in the UK was 10.4 in June, which was 56% above the five-year average.

The end of the stamp duty holiday will likely prompt more buyers to list their property, which will support a recovery in momentum. There are early signs that is already happening – the number of market valuation appraisals in the first week of July was 3% above the five-year average, for example.

"Stock is still low but building,” according to James Cleland, head of Knight Frank’s Country business. “There will be a gradual restocking over July and August and good houses will sell well over the summer. It actually feels like we’re moving towards a better place as a rebalancing of the market is underway.”

Recognising the strength of demand despite the end of the SDLT holiday may persuade more prospective sellers to list their property, returning more balance to the market.

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