The latest UK residential transactions statistics report from HMRC reveals a bumper month in June as forestalling activity by taxpayers in England and Northern Ireland sends transactions numbers skyward, with figures rivalling the highs seen in boom years of 2006 and 2007.
Iain McKenzie, CEO of The Guild of Property Professionals, says: “More than 213,000 house sales were completed in June as buyers raced to beat the impending end of the stamp duty holiday - the highest number since the introduction of the statistics in April 2005. Much of last month’s rise is due to the last-minute scramble to make the most of the stamp duty holiday, but the holiday hasn’t fully wound down yet, and we could still see a boom in areas with housing priced under £250,000.”
According to the report, the provisional non-seasonally adjusted estimate for UK residential transactions in the second quarter of this year is 428,620, which is the highest Q2 total since the introduction of these statistics in April 2005, as well as the highest quarterly total since the third quarter of 2007.
McKenzie says that the property market has been full steam ahead since it reopened following the initial lockdown last year. The stamp duty holiday added further fuel to the market with people moving their plans to move to benefit from the tax relief. “The stamp duty holiday has played a part in the frenzied market we have seen over the past while, as has its deadline. As expected, it is the rush to beat the incentive’s deadline that has had the greatest impact on the number of transactions, rather than the incentive itself. The property market experienced a similar pattern when the Mortgage Interest Relief at Source or MIRAS scheme end. It was introduced in the UK in 1983 in a bid to encourage home ownership. The scheme allowed borrowers tax relief for interest payments on their mortgage. While the scheme was reasonably successful, it was its removal that spiked activity and house prices as buyers rushed to beat the cut-off date – inciting the first property boom in decades,” explains McKenzie.
He adds that demand for houses still exceeds supply by a huge margin, with Guild Members seeing some of the lowest properties available per branch in living memory. “With such a scarcity of housing stock, and the continuing lower level of stamp duty holiday, there is no sign of prices slowing down any time soon,” he concludes.