June 2021 was likely the busiest month most estate agents, conveyancers, mortgage providers and removal firms have ever seen. Stamp Duty Land Tax (SDLT) rates were at nil for properties up to £500,000 until the end of June, causing a clamor for completion. Hitting the right date had the potential to save buyers thousands.
We predicted that 325,000 homes would miss the stamp duty deadline last year. We were the first to calculate this number, and this information was instrumental in persuading the Chancellor to extend the original deadline.
Now the final figures are in, we’ve carried out some analysis on the effects and the aftermath of the stamp duty holiday.
The Stamp Duty Holiday Effect: The Headlines
Completions:
- There were 78,022 completions in the UK in the final week of the stamp duty holiday
- There are usually 19,000 completions per week. But in the last week, there were 4 times as many
- Over 36,000 completions were on the final day
Missed Out:
- 124,000 properties that had a sale agreed before 31st March 2021 didn’t complete before the stamp duty deadline
- Only 3,600* of these had their sales agreed prior to the start of 2021, so the predicted "cliff edge" was more of a plateau
Benefits:
- 1.1m transactions were completed during the stamp duty holiday window (when adjusting for the window length in the four countries that make up the UK)
The question is, what will happen to the property market now the higher level of stamp duty holiday is over?
The Stamp Duty Holiday Aftermath
We took a look at the first full week's data post the 30th June to the 8th July to determine insights into the market. How active will it be without the top tier of the financial incentive?
- Fallen through volumes for the 7 days since the 30th June were at an average of just 950 per day
- This is almost the same as the average of the last year at 964
So far, the predicted wave of fall throughs, chain collapses and withdrawn properties has not happened.
Property supply, as measured using the volume of new instructions hardly moved with volumes down just 1%. There is a suggestion of a market slow down though, as the weekly average was 9.8% below the weekly average for last year.
Property demand, as measured by the volume of sales agreed also hardly moved with volumes down just 3%. The weekly average, however, was 8% below the weekly average for last year. As exceptional peaks in demand were experienced last year, we’d expect to see a downturn in comparison.
In summary, there are no strong signs of a property market crash as yet.
Of course, the 250k limit will be removed on 30th September so it will be interesting to see how this affects the market. We will continue to monitor the effects of the Stamp Duty holiday with interest and report further as we gather additional data.
* Please note that these are our flash numbers which may be subject to change when Land Authorities release final numbers.
For more information, or to learn more about our property market insights, then please contact Katy Billany, (Our Executive Director for Estate Agency Services) at katy.billany@twentyea.co.uk.