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House sales plummet as stamp duty holiday ends

The number of homes sold in the UK tumbled by more than half last month, official data showed on Tuesday.
According to HM Revenues & Customs, the provisional seasonally-adjusted estimate of UK residential transactions in October was 76,930. That was a 28.2% fall on October 2020 and a 52% drop on September, when the stamp duty holiday finally ended.

In contrast, non-residential transactions rose on the same basis to 10,160, a 10.4% annual jump and 1% higher month-on-month.

On a non-seasonally adjusted basis, there were 85,090 transactions in residential property, the lowest total since October 2012. Year-on-year transactions were down 30.1% and by 48.4% month-on-month.

The chancellor Rishi Sunak scrapped stamp duty tax on the first £500,000 of property prices in England in 2020, to help boost the property market following the first national lockdown. This summer saw the tax phased back in, with the exemption reduced at the end of June to £250,000 before reverting to £125,000 on 30 September in England.

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 deadline, so it’s not surprising.

“House sales will likely return to the historical norms before the pandemic, as the cost of moving becomes a factor again.”

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “There’s nothing to frighten the horses in these figures. We always see drops like this after the end of a tax break, and we tend to see buyers hunker down for the winter, so the combination of the two was always going to mean a quieter few months.

“The monthly drop looks spectacular but this was from an enormous peak, created by the final stamp duty holiday deadline.”

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