Transactions down, says HMRC, as it reveals long-term stamp duty effect

The number of transactions in the housing market has fallen for the third successive month - and for the first time this year, has failed to reach the 100,000 mark.

There were 96,910 transactions in June, on a seasonally-adjusted basis - this is 3.3 per cent down on May’s figure and the lowest total since last October.

However, the data - from HM Revenue and Customs - signifies a small one per cent annual rise on the June 2016 figure, which was itself relatively low in the aftermath of the introduction of the stamp duty surcharge on additional homes.

It is also the first time this year that the number of transactions has fallen below 100,000 a month.

"These figures are disappointing. We would have expected them to be much higher bearing in mind the turmoil in the market this time last year following the introduction of the stamp duty surcharge" says former RICS residential head and north London estate agent, Jeremy Leaf.

The HMRC data released for June also includes an interesting historical note regarding house price movements and transaction patterns since the 2007 banking crisis:

“The clearest feature ... is the sharp fall in residential transactions at the end of 2007, coinciding with the housing market slump and credit crunch. Prior to this point, the number of transactions had risen constantly over a number of years to reach a peak of around 150,000 per month. From December 2008 to February 2014, there was a slow but steady upward trend in the seasonally adjusted count. 

“The seasonally adjusted transaction estimate shows a distinct peak at December 2009. This is associated with the end of the Stamp Duty Land Tax 'holiday', during which the lower tax threshold was temporarily raised to £175,000. 

“The forestalling effects of this 'holiday' coming to an end also show as higher than normal transactions in the previous few months as homebuyers brought forward their purchases. There is a corresponding drop in the early months of 2010. 

“There is another, smaller, peak and trough in March and April 2012 due to the ending of the SDLT first time buyers' relief. This relief was in effect from 25 March 2010 to 24 March 2012 inclusive. Around 7,000 transactions per month benefitted from this relief, although this number doubled in its final month. 

“March 2016 recorded the highest number of transactions in the last 10 years. This peak is associated with the introduction of higher rates on additional properties in April 2016.”