Transaction figures released today (August 24) by HMRC show a 61% decrease in moving activity in July compared to June following the completion of the first stage of the SDLT vacation phase-down process.
From July 1 to September 30, only properties in England up to £ 250,000 are eligible for the zero rate bracket; the Welsh government reinstated the land transactions tax (LTT) for all properties in Wales from July 1, where the zero rate bracket was reduced to £ 180,000.
July figures show a provisional unadjusted estimate of 82,110 transactions, 1.8% more than in July 2020 and 61.5% less than in June 2021
The numbers also highlight the strength of the market with the second quarter 2021 numbers (429,290) the highest second quarter total since the introduction of these statistics in April 2005, and the highest quarterly total since the third quarter. quarter 2007 (442,930)
Despite the decline in the number of transactions, industry figures remain optimistic about market conditions, with indications that transaction levels will remain stable after the end of the SDLT holiday end in late September.
Last week, NAEA Propertymark released its own figures which show a ‘rebalancing’ of prices and demand with Chief Executive Officer Nathan Emerson says
“The slight rebalancing in the market this month is good news and a step in the right direction, with the supply of properties starting to increase and the number of homes sold above asking price starting to level out. Now that the stamp duty holiday is nearing its final end, we expect this trend to continue in the coming months as people and spending habits return to normal after Covid. “
Adam Forshaw, General Manager of O’Neill Patient.
“Real estate transactions were to be expected to be weaker in July, but 62% is quite a drop. That said, June was a banner month as the transfer industry worked hard to secure so many home sales before the end of the first phase of the stamp duty holiday. This has seen record months for most companies in the transfer of ownership industry.
“We still see a good level of instruction in home sales and purchases, as people are always eager to beat the final stamp duty exemption on September 30. The positive news is that we are also seeing a strong comeback in the remortgage market despite the holiday season, which we hope will continue over the next few months. “
Andy Sommerville, Director of Search Acumen, comments
“After the mad rush to beat the stamp duty property tax holiday deadline at the end of June, there would still be a drop in activity over the summer months and we have seen that is reflected in today’s numbers with transactions down nearly two-thirds in the space of a month. However, while this may provide a welcome opportunity for the transfer industry to catch its breath, we expect this to be relatively short-lived.
“The phasing out of tax incentives could lower the number of transactions from their record highs for a short time, but the market will continue to be fueled by buyers who must adapt to sustainable societal changes in the post-world world. pandemic. It is therefore likely that the number of transactions will rise again in the fall, when people return from vacation and have had a few months to assess what their working and living conditions might look like in the long term.
“Faced with the prospect of high levels of activity in the market later this year and next, it has never been more important that the real estate industry continues to push the pace of change and technological innovation. The adaptability of businesses throughout the pandemic has kept the market going despite some of the most difficult conditions we have ever seen. Sure, many will enjoy a well-deserved rest over the summer, but it’s critical that business leaders build on the positive momentum we’ve seen over the past 12 months and continue to review how new processes and technologies, like AI, and increased digitalization of data can drive future efficiencies.
Following news this weekend from the influential Resolution Foundation think tank that the impact of the SDLT vacation may have been overestimated, with other factors playing an equal, if not more, role, Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown adds:
“Real estate sales fell by almost two-thirds in July, after the deadline for the stamp duty holiday expired. This demonstrates the powerful psychological impact of the tax break, which goes far beyond the actual savings that cash buyers could save. “
“The stamp duty holiday did not create demand out of nowhere. There were already crowds of people ready to buy due to the changes in the way we live and pent-up demand for the market to close in the first foreclosure. The tax break just opened an eight month window, through which this crowd of people tried to squeeze in… it meant an explosion in property sales, and the fact that there were fewer sellers than there were. buyers at a time of such massive demand, has driven prices up through the roof.