House sales plunge as tax holiday ends

PROPERTY sales plummeted in July after the stamp duty holiday was tapered and buyers’ tax savings shrank.

HM Revenue & Customs recorded 82,110 residential transactions last month, a drop of more than 61pc on the 213,120 sales in June.

It came after a huge spike in sales as buyers rushed to push through deals in time to make the tax saving. The figure was just 1.8pc higher than July 2020, when the housing market had recently reopened after the first lockdown.

HMRC attributed the huge monthon-month fall to the tapering of the stamp duty holiday at the end of June. Up until this point buyers could save a maximum of £15,000 in tax, but in July this dropped dramatically to £2,500. The fall in sales was significantly

steeper than that recorded in April this year, when transactions dropped by almost 36pc after a rush to complete ahead of the initial stamp duty deadline.

At the time it was one of the biggest declines ever recorded by HMRC, behind the first lockdown in April 2020 and April 2016, when the stamp duty surcharge was introduced for landlords and second-home owners. The frenzy of buyers rushing to meet the stamp duty holiday deadline drove house prices up by 13.2pc in the year to June.

Anthony Codling, of property website Twindig, said the drop was the first of two “stamp duty holiday cliffs”, with another expected when the tax break ends in its entirety in September.