HMRC: Property transactions dropped after removal of stamp duty holiday

The end of the stamp duty holiday saw property transactions drop by 52% month-on-month and 28.2% year-on-year, highlighting how the tax incentive distorted the market.

The HMRC data found there were just 76,930 transactions in October 2021, the month after the second stamp duty deadline.

At the end of September stamp duty resumed being charged on property purchases over £125,000, rather than over £250,000.

Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “Property transactions have halved in a month, coinciding with the removal of the final stamp duty discount, and this will undoubtedly mark the resumption of lower sales volumes moving forward.

“Transactions plummeted similarly after June’s stamp duty deadline, so it’s not surprising to see them fall in this way again.

“With the tax incentive now completely removed, we’ll see the back of these peaks and troughs as transactions settle into a more consistent pattern.

“This fall in sales signals that there is unlikely to be any long-term dividend for transactions as a result of the stamp duty holiday. House sales will likely return to the historic norms seen before the pandemic as the cost of moving becomes a factor again.”

Many have reported that transactions levels returned to strength in November, following a quiet October.

Guy Gittins, chief executive of Chestertons, said: “At the end of October, our new buyer enquiries were up 18% compared to this time last year when we already had the added urgency and incentive of the Stamp Duty Holiday.

“We have seen demand being driven by buyers who didn’t manage to agree a deal within that timeframe and those who put their search on hold during the summer break.

“As buyer demand remains unsatisfied, properties are going under offer increasingly faster making for an extremely competitive market.”

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