Record house sales in June amid 'frenzied rush' to beat stamp duty
UK house sales surged to record levels in June amid a "frenzied rush" of buyers to beat the stamp duty deadline.
HM Revenue and Customs (HMRC) said an estimated 213,120 sales took place in June - the highest monthly UK total since the introduction of the statistics in April 2005.
The figure was 216.1 per cent higher than June 2020 and 108.5 per cent above that of May 2021.
Some 428,620 house sales took place in the second quarter of this year - the highest quarterly figure since the third quarter of 2007 and the highest total for the second quarter of any year on HMRC's records.
The report said the June figures "have captured significant impacts from forestalling activity by taxpayers".
It explained: "Forestalling is when advanced action is taken to prevent an anticipated event.
"For these statistics, forestalling refers to taxpayers completing property transactions earlier to take advantage of government housing market policies."
In England and Northern Ireland, buyers rushed to complete transactions before the temporarily increased "nil rate" band to £500,000 for residential stamp duty land tax (SDLT) ended on June 30.
The temporarily increased nil rate band has now shrunk to £250,000, until September 30, meaning current buyers still have an opportunity to make some tax savings. From October it will revert to normal levels.
The report added: "Forestalling has also been observed in Wales as taxpayers sought to complete transactions before the temporarily increased nil rate band to £250,000 for residential land transaction tax (LTT) ended on June 30 2021."
On a seasonally adjusted basis, the revenue body estimated that 198,240 homes were sold in June - 219.1 per cent higher than June 2020 and 74.1 per cent above that in May 2021.
Seasonally adjusted figures strip out variations associated with particular times of year.
June is a historically high month for transactions as they increase during summer, which has also likely contributed to very high June 2021 figures, HMRC said.
It also cautioned that estimates for the latest month are based upon incomplete data as not all tax returns from completed transactions during that month will have been received.
Transactions halved annually in April and May 2020 as the market was effectively shut down due to the impact of the coronavirus pandemic. This also helped to create pent-up demand as the market reopened.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "June is always a busy month for the property market but this one was exceptional as the stamp duty holiday and low mortgage rates spurred buyers on.
"With lenders keen to lend and having plenty of money to do so, mortgage rates continue to fall to new lows. As Nationwide launches a five-year fix this week at sub-1 per cent, there continues to be plenty of competitive deals to attract borrowers."
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: "These figures clearly illustrate the frenzied rush to the finishing line for buyers to take advantage before the stamp duty holiday drew to a close.
"However, activity has reduced since, particularly in London where the savings were greatest. Early signs are that sales will be down significantly, but we have noticed nearly all of our transactions are continuing with very few renegotiations. This leads us to believe prices will not be markedly different over the next few months."
Sam Mitchell, chief executive of online estate agent Strike, said: "June saw the property market turn to a frenzy, with homeowners scrambling to complete and exchange in time for the end of the stamp duty holiday.
"There may be no further extension this time, but let's not forget the tapering off period is still in place until the end of September, meaning properties valued under £250,000 still benefit from the relief.
"What's more, there are plenty of other incentives at play to keep the market moving, including the increase of 95 per cent mortgage offers combined with low interest rates.
"The fact remains that the pandemic has forced a change of lifestyle for many, and with this has come changing needs for a property. Despite some now returning to work, we're still seeing increased numbers seeking a more rural area with extra space - and this trend is likely to stay for the long-term."
Sarah Coles, personal finance analyst, Hargreaves Lansdown said: "There's been a huge imbalance between buyers and sellers during the spring and early summer, which has meant panic buying, bidding wars, and the return of gazumping."
Lucian Cook, Savills head of residential research said he expected another peak in September "when the final remnants of the stamp duty holiday come to an end, but given that the maximum saving has fallen from £15,000 to £2,500 it is likely to be less pronounced".