Property market starts year on a firm foundation

HOUSE sales have started the year on a firm foundation.

The latest figures from HMRC show the number of residential properties being bought and sold is up 6.8% in the past year.

While the post-Christmas property market is traditionally quieter, the year-on-year comparison suggests that the uncertainty around Brexit may not be slowing the market nationally.

“Data recently released by the Office for National Statistics indicated that UK property prices had increased by just 0.6% during the year, the lowest annual rise in seven years,” said Jane Gunnell, head of Blandy & Blandy LLP solicitors’ Commercial Property team.

“In London, property prices had actually fallen by 3.8%, while those in the south had dropped by 1.8%.

“Following a raft of changes aimed at providing first time buyers and the lower end of the market with a boost, some experts have criticised the Government’s failure to also help or incentivise older homeowners.

“They argue that these homeowners need to be encouraged to downsize and move in order to keep the property market in general flowing.”

HMRC’s figures show the government has received £1 billion less from Stamp Duty Land tax in the past year, bringing the total down to £11.9 billion for the 2019 tax year.

“It is very likely that this drop can be attributed to three things,” added Jane.

“First, a slowdown at the top end of the property market, particularly involving properties valued at over £1 million.

“Second, a large proportion of firsttime buyers now being exempt from paying Stamp Duty Land Tax (SDLT).

“And lastly, a fall in the number of landlords and investors purchasing buy to let properties due to the withdrawal of mortgage interest relief for buy to let landlords and a SDLT surcharge imposed on those owning more than one property, introduced in 2016.”

On Capital Gains Tax, HMRC reveals the government received £9.2billion in the 2019 tax year, a sharp rise from £7.8 billion in 2018.

“The increase is, in part, attributed to buy to let landlords selling a larger number of properties,” explained Jane.