Rishi Sunak’s stamp duty holiday ‘has been critical in keeping the economy moving’

Stamp duty receipts collected by the Treasury from housing transactions increased by 27% between July and September, when compared with the previous three-month period as lockdown restrictions eased, the latest figures show.

Some £1.9bn was raised from stamp duty in the third quarter of the year, but this total was down by 40% compared with the third quarter of 2019, when stamp duty receipts totalled £3.1bn, according to figures released by HM Revenue and Customs.

HMRC said residential property transactions in the third quarter of 2020 were 72% higher than in the previous three months and 18% lower than in the third quarter of 2019.

Housing market activity and property prices have increased thanks to higher demand, which has been fuelled in part by the stamp duty holiday.

Office for National Statistics data showed last week that the average UK house price reached a record high of £245,000 in September, after jumping by 4.7% over the year.

Nick Leeming, chairman of Jackson-Stops, commented: “There is no doubt on the impetus that the government’s SDLT holiday has provided for many to take the decision to move in the second half of this year. Receipts for residential transactions in Q3 were 72% higher than in Q2, although 18% lower than September 2019.

“It’s important to note that this uplift will not include the vast majority of transactions in which buyers will have paid no SDLT at all on their purchase. However, the data does indicate that a vast number of home buyers could have made savings when purchasing their next home, with government’s income from SDLT falling by over 40%.

“With transactions taking an average of three months across the UK, we are only just starting to see the impact of the government policy in official data.

“While buyers have also been incentivised to move due to lifestyle changes post-lockdown, we know that demand for these buyers can only last so long.

“The government’s SDLT holiday has been critical in keeping the economy moving throughout some of the toughest conditions this country has ever experienced, making it possible for people to move who otherwise wouldn’t be able to afford too at this time.”

Leeming is calling on the chancellor to consider extending the stamp duty holiday beyond March 2021.

He added: “The chancellor can maintain momentum in the market by either extending the policy or by providing relief for buyers elsewhere. I urge him to consider the positive impact this policy has had to date and to take action in March 2021 to keep the market moving.”

Although the stamp duty threshold has been raised, meaning fewer properties are being caught by the tax, high levels of buyer activity has maintained a healthy stream of receipts for the government, and Andy Sommerville, director at Search Acumen, is among those that would like to see this trend continue.

He said: “Sharp rises in house prices since the reopening of the property market has partially offset the reduction in lower valued properties liable for SDLT. Upward pressure on prices for properties that were priced below £500,000 before the adjustment has pushed them above the new threshold.

“Properties valued around the £500,000 mark are often larger and have access to green space – especially outside of cities. These types of homes are experiencing a sharp inflow in buyer interest, largely driven by the rapid adoption of remote working and shifts in work life balances prompting consumers to reassess their housing needs. Overall price rises are also topping up the government’s tax take from SDLT.”

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3 Comments

  1. RichardHill61

    It wasn’t even his idea!!

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  2. AgencyInsider

    Should read: ‘…has been critical in keeping the economy moving for the time being.‘ All it has done is encourage people to move earlier than they would otherwise. Come next March the transaction levels will plummet and over time they’ll average out to near-normal year-on-year figures.

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  3. David Jabbari Solicitor CEO Muve

    The loss of £2bn in stamp duty revenue relative to the same period last year suggests that an extension of the SDLT holiday is likely to be the last thing Sunak is thinking of right now! There are cheaper ways to reflate the economy,

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