With the phased end of the government’s stamp duty holiday almost upon us, homebuyers who have not yet completed their purchases face a frantic rush to do so today.
Those that fail to complete by the end of September risk having to pay up to £15,000 extra to secure their property, and that is why renegotiations are already now underway.
“The scramble to save up to £15,000 in cold hard cash has, unsurprisingly, injected pure rocket fuel into the market,” said Rob Gill, managing director of broker Altura Mortgage Finance. “The stamp duty holiday has been the overwhelming driver of the property market since it was announced by Rishi Sunak last July.”
Last week, the latest property data was published by HMRC. It showed that housing transactions in May 2021 were almost 140% higher than in the corresponding month last year, although it is worth noting that the country was under lockdown in that period.
Total HMRC tax receipts in the last 12 months exceed pre-pandemic receipts for the same period in 2019, thanks in part to the surge in property transactions, and show that the country is bouncing-back, according to tax and advisory firm Blick Rothenberg
Paul Haywood-Schiefer, a manager at the firm, said: “Not only have the country’s tax receipts returned to expected levels, there have also been more than half a million [511,140] residential property transactions in the last four months to 31 May 2021.
“Not even the race to beat the 3% stamp duty surcharge for second properties (four months to 31 March 2016 – 460,400) had so many property transactions in such a short space of time and the last time that it occurred was in the four months to 31 December 2007 (504,190).”
He added: “In fact the total for the last 12 months is 1.3m residential property transactions, 22.7% [243,790] up on the 12 months to 31 May 2020. Clearly the SDLT holiday, a year of being trapped in the same four walls, and a new vision of the future of work arrangements meaning the need for space for a home office and not necessarily needing to being in such close proximity to your employer, has had a huge impact on this.
“We expect that June’s results will push this figure even higher as the last transactions squeeze in before the 30 June 2021 deadline. Meanwhile, SDLT in those four months was £3.6bn”
Paul said: “Total HMRC receipts in the last 12 months to 31 May 2021 are at £630bn which exceed pre-pandemic receipts for the same 12 months to 31 May 2019 [£624bn]. The 12 months in between [to 31 May 2020] had seen the total receipts fall to £588bn.
He added: It is positive that receipts are beginning to bounce-back and being fuelled by increases in income tax and NIC receipts. However, there’s a long way to go to regain the billions of aid pledged in the pandemic, and the Government will want to carefully consider its next move on tax reform.”