House sales slumped by nearly two thirds last month as activity cooled after the end of the full stamp duty holiday, new figures have shown.
HM Revenue and Customs (HMRC) said an estimated 82,110 residential property sales took place in July, down 62 percent on June’s record levels.
It compares with a frenzied June for Britain’s property market, when HMRC reported 213,120 sales, the highest monthly UK total since the introduction of the statistics in April 2005 and more than double numbers seen a year earlier.
HMRC said that, following last month’s stamp duty deadline, “an expected but noticeable decrease has been observed within provisional July 2021 UK residential transactions statistics.”
In England and Northern Ireland, buyers raced to complete purchases before the temporarily increased “nil rate” band to £500,000 ($686,000) for residential stamp duty land tax (SDLT) ended on June 30.
This relief has since been tapered to £250,000 ($343,000) and the nil rate band is set to revert back to £125,000 ($172,000) on Sept. 30.
But despite the drop off in sales activity last month, the HMRC data showed that purchases were 1.8 percent higher than in July last year, when activity was still impacted by the near-complete closure of the market from March until mid-May.
Property market experts said that while activity has passed its peak following the end of the full tax break, demand remains strong as the pandemic and homeworking trend continues to drive changes in demand.
Jeremy Leaf, north London estate agent and former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said, “These figures for the period just after the withdrawal of the full stamp duty holiday are perhaps better than expected although reflect what we have been seeing, that buyers were still keen to proceed with their purchases, even though they were saving less than they would have done before the end of June.”
RICS reported earlier this month that house hunter inquiries started shrinking in July, bringing to an end a four-month positive streak, while Nationwide’s house price index showed values dropping back by 0.5 percent in the first such fall since March.
Leaf said, “The market is definitely calmer now, but many are taking advantage of staycations to keep in touch with market activity, with listings slowly beginning to rise again as prospective sellers return from holiday.”
Mike Scott, chief analyst at estate agency Yopa, added: “Given the number of sales that were brought forward, this is a high number and suggests that the dip in the number of sales following the removal of many of the tax savings will be short-lived.
“We expect another very strong month in September, before the new deadline for the remainder of the stamp duty holiday, followed by another short-lived dip.”
By Holly Williams