HMRC brings agents back down to earth - big drop in transactions

House sales slumped nearly two thirds last month as the main deadline for the stamp duty holiday passed. 

HM Revenue and Customs says 82,110 residential property sales took place in July, which was down an eye-popping 62 per cent on June’s record levels, when there were 213,120 sales, the highest monthly UK total since the introduction of the statistics in 2005.

HMRC says “an expected but noticeable decrease has been observed within provisional July 2021 UK residential transactions statistics”.

The main reason was that buyers in England and Northern Ireland attempted to beat the June 30 stamp duty deadline; since then the holiday has been tapered and will end completely on September 30.

However, despite that huge fall, the July 2021 sales total was a marginal 1.8 per cent up on a year earlier. 

Jeremy Leaf, north London estate agent and former residential chairman of the Royal Institution of Chartered Surveyors, says: “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.

“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.”

And Nick Leeming, chairman of Jackson-Stops, comments: “Despite this marked cooling in transaction activity, we are still seeing large numbers of potential buyers contacting us each week, especially for properties in highly desirable suburban, countryside and coastal locations. 

“For sellers in these areas, there is a good opportunity now to capitalise on the fact that the market offers relatively unincumbered access to a deep pool of proceedable buyers with limited competition from other homeowners.” 

Mike Scott, chief analyst at estate agency Yopa, adds: “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.”