The latest residential property data from HMRC showed an “expected by noticeable” fall in provisional transaction numbers in July as the first stage of winding down the stamp duty holiday took effect, following a surge in ‘forestalling’, or completing transactions earlier, in June.
According to the tax collector’s provisional numbers, a total of 73,740 residential transactions took place in the UK in July, which was 4.2% higher than a year ago, but 62.8% lower than in June.
The provisional seasonally-adjusted estimate of UK non-residential transactions for July was 9,760, which was 21% higher than July 2020 and 5.9% lower than June.
Announced by Chancellor Rishi Sunak in July last year, the stamp duty holiday saw the land tax rate reduced to nil for the first £500,000 value of any property, but from 30 June, this was reduced to the first £250,000.
That rate will remain in effect until the end of September at this stage.
Paul Stockwell, chief commercial officer at Gatehouse Bank, said it was “no surprise” that July saw a big slump in transactions compared to June’s “spectacular” highs.
“A record number of buyers had been eager to complete their sale before the stamp duty deadline,” he said.
“Transactions may creep up again in August, and we can expect another flurry of activity in September as buyers try to complete sales before the final stamp duty savings are removed.
“This wave is unlikely to match June’s in scale, but the effect of the cliff-edge will still be in attendance.”
Stockwell added that, while transaction levels were now set to stabilise, the Bank of England’s figures showed that mortgage approvals still surpassed pre-pandemic levels, indicating that buyer demand remained strong.
“Low supply is likely to be the only thing which could hold transaction levels back.”
