Recent research published by the House Builders Federation (HBF) and Knight Frank has identified the staggering economic value of the UK property market.
While the sector’s contribution to the UK economy is widely acknowledged, the research report notes that until this research was conducted, there wasn’t a tangible monetary value associated with that contribution.
The study, which was published in a short report here, aimed to examine the re-sales market, taking into account the total spend associated with moving house in the UK.
Research findings indicate that the secondary housing market brings a broad and significant range of economic benefits, which include:
- For every resales housing transaction that takes place, the economy benefits by an average of £9,559. Scaling that figure up means that for every 100,000 housing transactions, there is a net impact of almost £1 billion in Gross Value Added (GVA)
- Collectively, those 100,000 transactions either directly or indirectly support over 11,500 jobs nationwide
- Expenditure induced by property transactions, either directly or indirectly, includes more than £500m on renovations, estate agents, legal fees, household goods and removals (the latter alone contributing £72m).
The report also examines recent trends and fluctuations in the UK property market, noting that since it re-opened in May, the release of short and longer-term ‘pent-up demand’ - accelerated by July’s announcement on a stamp duty holiday until March 2021 - has led to robust sales.
However, it also suggests that against a backdrop of economic contraction, the scaling back of the Help to Buy equity loan scheme - coupled with the conclusion of the stamp duty holiday - could bring further uncertainty to the market from next March onwards.
Speaking about their findings, HBF’s Policy Director, David O’Leary, said: “HBF has, for several years, sought to highlight the stubbornly low volumes in the home mover market, an increasingly important issue as the Help to Buy scheme winds down.
“Before the Financial Crisis, around 6-7% of all properties in the housing stock transacted in the average year. In recent years, the average has fallen to around 4%.
“Today’s report provides further evidence of the importance of the housing industry to UK plc, echoing statements in recent months from the Chancellor about the jobs supported by the Government’s Stamp Duty holiday, including those in September and October.”
As the UK moves into what could be a long and uncertain winter, it will be vital to ensure the property sector is supported through any measures necessary to ensure it maintains momentum and continues to contribute so vitally to our economy.