Home sales drop 62% in July after stamp duty holiday deadline Business News

Home sales fell 62% last month after the stamp duty holiday ended, new figures show.

An estimated 82,110 residential property sales were closed in July, up from 213,370 in June, when thousands of buyers rushed to take advantage of the tax cut.

June saw the highest monthly real estate sales total since April 2005 and more than double the number recorded in the same month a year earlier during the first coronavirus lockdown.

HMRC said that after the stamp duty deadline last month, “an expected but noticeable decrease was seen in provisional UK residential transaction statistics for July 2021”.

The stamp duty holiday in England and Northern Ireland meant that until June 30, buyers paid no tax on the first £ 500,000 of a property, saving up to 15,000. £.

From 1 July the threshold was lowered to £ 250,000 and fell to £ 125,000 on September 30.

The savings were more than offset by rising house prices which was fueled in part by lower taxes. A report by the Resolution Foundation think-tank concluded that the main effect of the stamp duty suspension had been to transfer billions of pounds from taxpayers to existing owners.

Jeremy Leaf, North London real estate agent and former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said: “These figures for the period just after the full stamp duty holiday was withdrawn may be better than Although expected to reflect what we saw, that buyers were still keen to make their purchases, even though they were saving less than they would have done before the end of June.

RICS reported earlier this month that surveys of home hunters started to decline in July, ending a positive four-month streak, while Nationwide’s House Price Index showed a drop of 0 , 5% of values ​​during the first such drop since March.

Mr Leaf said, “The market is definitely quieter now, but many are using the holidays to stay in touch with market activity, with listings slowly starting to increase as potential sellers return from vacations.”

Mike Scott, chief analyst at Yopa Realtors, said: “Considering the number of sales that have been brought forward, this is a high number and suggests that the decline in the number of sales following the removal of many tax savings will be short.

“We expect another very strong month in September, ahead of the new deadline for the remainder of the stamp duty holiday, followed by another short-lived cut.”

A spokesperson for the Treasury said: “Our temporary reduction in stamp duties has helped protect hundreds of thousands of jobs dependent on the housing market by moving moves forward.

“Those who missed the deadline in June can still benefit from the £ 250,000 stamp duty holiday until the end of September, making it easier to transition to normal thresholds.”

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This notice was published: 2021-08-24 17:48:45

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