Budget Impact Headline
Put simply, the budget had a very positive reaction on the sale property market where both supply of property and demand for property have increased in a post-Budget period compared with a like for like pre-Budget period.
Since the Budget:
- Demand for property rose by 12.9%
- Supply of property rose by 12.2%
There was also an impact on the lettings market, where although demand increased marginally (by 2.6%), supply of rental properties fell by 6.5%.
Budget Impact by Region
Our next step was to look at which UK Regions the Budget impacted the most. Firstly, in terms of demand, this is shown in the following chart:
Note that ALL UK Regions experienced a rise in demand. Further, this increase even happened in Scotland, although they were not covered by the announcement as their Stamp Duty Holiday is still planned to end at the end of this month. Wales, who announced a Stamp Duty Holiday extension until the end of June also had a modest rise in demand.
The second point to make is that the regions in the South East of the country saw the biggest rises in demand. The budget appears to be exceptional news for London demand, which we have reported in previous client briefings was not growing as fast as the rest of the UK.
If we look at supply of properties, this is shown in the following chart:
Here, we see that all regions, with the exception of Wales, have experienced an increase in supply. However, Inner London and the South East experienced the largest rises.
We recognise this is an extremely early view on the property market’s reaction to the Budget and we will keep an eye on further developments for you. This said, the volumes are statistically significant and as such it represents an important finding to share with you.
In our view, the Budget was good news for the property industry from both a short and medium term perspective and as such, it is not surprising that the changes announced have had the positive impact they did.
Definitions and Methodology
We will continue to define supply by looking at the volume of New Instructions, this is property coming to the market where the owner of a property has instructed an Estate Agent to advertise their property for sale.
As we will also talk about rental property in this client briefing, supply will also be measured by looking at the volume of New Instructions in the rental market, in this case where a landlord has instructed an Estate Agent to advertise their property for rent.
In terms of defining demand, we will be using the volume of sales agreed on properties for the sale market and lets agreed on properties for the rental market. These are both exceptional indicators of immediate demand.
Further to the above, we have calculated a pre-Budget period to be the 14-day window up to an including the day before the Budget announcement (to 2nd March 2021) and a post-Budget period to be the 14-day window which begins the day after the Budget (on 4th March 2021).
Because both analysis periods are 14 days and contain exactly the same number of days of the week, and as such, they can be directly compared.