What’s the impact of end of higher level of stamp duty holiday?
How is the property market reacting?
What’s the impact of end of higher level of stamp duty holiday?
It’s been a buoyant year in the UK’s housing market with an unprecedented amount of activity, especially towards the end of the higher level of stamp duty holiday as homeowners tried to complete. How is the property market reacting now that the higher stamp duty holiday level has come to an end?
The doom-mongers predicted a property market crash, but this is not the case looking at early data. The latest property market activity report from data agency TwentyCi gives an insight into what the impact has been.
TwentyCi has looked into the end of the highest tier of stamp duty relief with the passing of the June 30th deadline; at the impact this has had on the level of completions and fall-throughs in this period, and also given a snapshot of the first complete week’s data following June 30th to July 8th to see whether anything can be gleaned as to how buoyant the market will be without the highest tier of the financial incentive.
Stamp duty holiday impact
- There were 78,022 completions in the UK in the final week of the stamp duty holiday – over 36,000 on the final day. Typically the figure is 19,000 completions per week, so the final week created four times the usual volume.
- A total of 124,000 properties which had a sale agreed before March 31st 2021 did not complete ahead of the stamp duty deadline.
- 1.1m transactions completed in the stamp duty holiday window when adjusting for the window length within the four countries making up the UK.
After the end of the stamp duty holiday
- A large rise in the number of fallen through sales previously agreed has not yet occurred; numbers since June 30th are almost the same as the average for the last year.
- Supply and demand are both down marginally in the last week and both are less than 10% below annual averages; to be expected after the peaks observed.
What’s happening now?
Some predicted the collapse of chains, causing significant increases in the number of sales agreed falling through and withdrawn properties. The data reported by TwentyCi shows this is not currently the case.
Fallen through figures for the seven days following June 30th are at an average of just 950 a day; almost the same as last year’s average of 964.
Supply, measured by TwentyCi using the volume of new instructions; people putting their house for sale with an estate agent, has also barely moved in the last seven days. Volumes are down just 1%. The last week though is 9.8% lower than last year’s weekly average, indicating a slow-down in the market.
TwentyCi shows demand, measured using volume of sales agreed, is also little moved in the last seven days with volumes down only 3%. The last week though is 8% down on last year’s weekly average, but this is to be expected after such unusual peaks in the last year.
So, for those expecting a crash of the property market it’s definitely not happening, or not just yet.
The £250,000 stamp duty limit will be removed in England and Northern Ireland on September 30th and it will again be interesting to see the impact of this on the housing market.
While recent high levels of activity in the housing market are in part due to the stamp duty holiday, it’s important to remember that other factors are also playing a part in the buoyant market. Many households are looking for more space to allow for flexible working arrangements; some people have increased savings due to the Covid pandemic, and there is also continued low interest rates to factor in.
House prices remain strong and there is still high demand. So, if you are thinking of moving, the market is good and you should act now. To be in with a chance of getting the house you want you need to be in a proceedable position; a proceedable buyer is someone who has their current property on the market and has accepted an offer (ideally from another proceedable buyer).
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*Please note that the figures quoted in the above article are TwentyCi’s flash numbers which may be subject to change when Land Authorities release final numbers.