Record June house sales amid buyers’ ‘frenzied rush’

Stamp duty deadline in England and Northern Ireland drives market across UK, writes Vicky Shaw

House sales surged to record levels in June amid a “frenzied rush” of buyers to beat the stamp duty deadline.

HM Revenue and Customs (HMRC) said an estimated 213,120 sales took place in June – the highest monthly UK total since the introduction of the statistics in April 2005.

The figure was 216.1% higher than June 2020 and 108.5% above that of May 2021.

Some 428,620 house sales took place in the second quarter of this year – the highest quarterly figure since the third quarter of 2007 and the highest total for the second quarter of any year on HMRC’s records.

The report said the June figures “have captured significant impacts from forestalling activity by taxpayers”.

It explained: “Forestalling is when advanced action is taken to prevent an anticipated event.

“For these statistics, forestalling refers to taxpayers completing property transactions earlier to take advantage of government housing market policies.”

In England and Northern Ireland, buyers rushed to complete transactions before the temporarily increased “nil rate” band to £500,000 for residential stamp duty land tax (SDLT) ended on June 30.

In Scotland, a temporary reduction to the equivalent Land and Buildings Transaction Tax (LBTT) ended in March.

The temporarily increased nil rate band has now shrunk to £250,000, until September 30, meaning current buyers still have an opportunity to make some tax savings. From October it will revert to normal levels.

The report added: “Forestalling has also been observed in Wales as taxpayers sought to complete transactions before the temporarily increased nil rate band to £250,000 for residential land transaction tax (LTT) ended on June 30 2021.”

On a seasonally adjusted basis, the revenue body estimated that 198,240 homes were sold in June–219.1% higher than June 2020 and 74.1% above that in May 2021.

Seasonally adjusted figures strip out variations associated with particular times of year.

June is a historically high month for transactions as they increase during summer, which has also likely contributed to very high June 2021 figures, HMRC said.

It also cautioned that estimates for the latest month are based upon incomplete data as not all tax returns from completed transactions during that month will have been received.

Transactions halved annually in April and May 2020 as the market was effectively shut down due to the impact of the coronavirus pandemic. This also helped to create pentup demand as the market reopened.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “June is always a busy month for the property market but this one was exceptional as the stamp duty holiday and low mortgage rates spurred buyers on.

“With lenders keen to lend and having plenty of money to do so, mortgage rates continue to fall to new lows. As Nationwide launches a five-year fix this week at sub-1%, there continues to be plenty of competitive deals to attract borrowers.”

Sam Mitchell, chief executive of online estate agent Strike, said: “June saw the property market turn to a frenzy, with homeowners scrambling to complete and exchange in time for the end of the stamp duty holiday.

“There may be no further extension this time, but let’s not forget the tapering off period is still in place until the end of September, meaning properties valued under £250,000 still benefit from the relief.

“What’s more, there are plenty of other incentives at play to keep the market moving, including the increase of 95% mortgage offers combined with low interest rates.”