"Sharp rises in house prices since the reopening of the property market has partially offset the reduction in lower valued properties liable for SDLT."
The total number of property transactions liable for stamp duty increased by 68% between Q2 and Q3, rising from 149,000 to 250,000, according to the latest data from HMRC.
Its figures show that total SDLT receipts rose by 27% over the last quarter, from £1.5bn to £1.9bn, due to the easing of the lockdown measures.
Residential property transactions were 72% higher than in Q3, but remainn 18% lower than in Q3 2019.
Total SDLT receipts were 40% lower than in Q3 2019, due to the impacts of Covid-19 and the residential stamp duty holiday.
Since the introduction of first-time buyers’ relief there have been 568,000 claims that have benefited, totalling £1,344 million over the period. Since the introduction of a residential SDLT holiday on 8th July 2020, there is no requirement for first-time buyers to claim the relief.
Andy Sommerville, director at Search Acumen, commented: “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.
“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.
“At the same time, those involved in the transaction process are struggling to clear a backlog of inquiries, putting many at risk of missing out on the stamp duty holiday before it reverts back to normal.
“Digital innovation has been vital to the property market’s recovery under Covid-19. This energy needs to be harnessed by everyone to improve data consumption and adoption of digital practices. With local authorities continuing to close, this will be crucial to keep transactions progressing and helping conveyancers, lenders and brokers make efficiency gains that ultimately benefit clients.”
Rob Barnard, director of intermediaries at Masthaven, added: “The latest statistics from HMRC revealing an increase in Stamp Duty Land Tax transactions in Q3 are unsurprising after the total shut down of the housing market in the previous quarter. This summer saw a ‘mini boom’ in the housing market and a bounce back from lockdown that few could have predicted. Undoubtedly, the revitalisation of the housing sector can be largely attributed to homebuyers looking to take advantage of the stamp duty holiday. However, with the deadline for stamp duty break fast approaching, it’s vital for people looking to move home to act now if they want to benefit from the initiative.
“With buyers in need of fast transactions and the mortgage market under pressure, specialist lenders can offer tailored, short-term solutions that meet these requirements, such as bridging loans. Specialist lenders and mortgage brokers need to work together over the coming quarter to ensure housing transactions can be completed within the deadline and explore alternative forms of borrowing that can help individuals achieve their home ownership dreams.”