Property transactions drop 55% in June compared to the 2021 stamp duty holiday bonanza

Property transactions fell 55% in June compared to the 2021 stamp duty holiday bonanza, HMRC says, as experts say house prices could fall

  • The number of properties sold fell 55% in June 2022 compared to the previous year
  • Experts say the sharp decline was partly due to last year’s stamp duty holiday.
  • Others warn that the cost of living crisis is beginning to affect the market
  • HMRC data also shows a 3.1% drop between May and June 2022.

The number of residential properties sold in the UK fell 55.1 percent in the year to June, official figures show.

HMRC said there were 96,290 transactions in total, down 55.1 percent from the 214,530 recorded in June 2021.

Month-over-month, transactions fell 3.1% compared to May 2022.

The significant drop in year-over-year home purchases was likely due to the end of the stamp duty holiday in June 2021.

As the cost of living crisis continues to put pressure on homeowners and movers, experts speculate that the decline in transactions will continue.

The tax break for movers, introduced in July 2020, led to increased activity as buyers could save up to £15,000 in tax until June 30, 2021.

The potential savings were then reduced to £2,500 until September 2021.

The figures for 2022 are more in line with those of June 2019, when 100,340 properties were purchased.

This suggests a leveling off of the market after the turbulence of the last few years. However, experts said the housing market was now also being affected by the cost of living crisis.

Back to normal: Property transactions increased significantly over the stamp duty holiday last year, but returned closer to pre-pandemic levels once the tax holiday ended.

Back to normal: Property transactions increased significantly over the stamp duty holiday last year, but returned closer to pre-pandemic levels once the tax holiday ended.

Jeremy Leaf, North London estate agent and former RICS residential agent, said: “While inevitably reflecting activity from several months in advance, these figures are always a better indicator of property market strength than more volatile house prices. “.

“The latest numbers are no exception and show how the cost of living crisis and rising interest rates in particular have contributed to an increase in duration and reduction in the number of transactions.”

Joshua Elash, director of property lender MT Finance, added: “The cost-of-living crisis is starting to hit with a dramatic drop in transactional activity in the property market compared to the same period last year, reflecting uncertainty broader in the economy in general, as well as the frenzy we witnessed last year as the stamp duty holiday was about to expire.

“We must be vigilant, as this trend could well lead to a more significant and faster-than-expected housing market cooling, which will translate into downward pressure on house prices, as homeowners and investors alike will focus on cost savings.”

While they won’t be welcomed by everyone, falling home prices could be good news for first-time homebuyers and certain types of movers.

A Yorkshire Building Society report published today found that the cost of living crisis prevents more than a quarter (27 per cent) of people in the UK from buying a home. The figure rises to a third (33 per cent) of all UK first-time buyers.

However, the cost of living crisis may mean that putting away a deposit remains difficult.

Economic volatility was also one of the most frequently cited concerns by those looking for a house but unable to buy it: more than a fifth (22 per cent) said in the Yorkshire Building Society report that the economic climate current was another factor preventing them from making a purchase.

Ben Merritt, director of mortgages at the Yorkshire Building Society, says: “Although a relatively recent development, the cost of living crisis has shot up to the top of the list of concerns when it comes to buying a house.

“The crisis is now felt by the entire population and seeps into all aspects of life. Plus, with inflation now running at 9 percent, it shows no signs of slowing down.

“With little visibility into what the future might hold or, indeed, how long the crisis will last, our research shows that many shoppers are hesitant about the market, feeling uncomfortable at the prospect of making a purchase in the current economic climate.

“The extent to which there is a supply problem in the housing market is shown by the fact that, despite this, house prices have continued to rise, and demand remains much higher than supply despite of everything”.

The best mortgage rates and how to find them

Mortgage rates have risen substantially as the Bank of England base rate has risen rapidly.

If you’re thinking about buying your first home, moving or remortgaging, or are a buy-to-let landlord, it’s important to get good, independent mortgage advice from a broker who can help you find the best deal.

To help our readers find the best mortgage, This is Money has partnered with independent broker L&C.

Our L&C-powered mortgage calculator can allow you to filter offers to see which ones best match your home value and deposit level.

You can also compare different fixed-rate mortgage durations, from two-year arrangements to five-year arrangements to ten-year arrangements, with monthly and total costs displayed.

Use the tool at the link below to compare the best deals, taking both fees and rates into account. You can also start an online application on your own time and save it as you go.

> Compare the best mortgage deals available now