HMRC data shows property market still recovering due to lockdown
The latest data from HMRC has revealed that residential property transactions for the UK have increased in October 2020 compared both with September 2020 and October 2019.
The increase in figures is thought to be as a result of the pent up demand due to the UK wide lockdown as a result of the coronavirus pandemic and the subsequent stamp duty land tax (SDLT) holiday.
Previous data released by HMRC revealed that residential transactions were relatively stable between October 2019 and March 2020.
Richard Pike, Sales and Marketing Director at Phoebus Software, says:
“We have now reached a point where the impetus created by the stamp duty payment holiday has taken property transactions above the level in the same month last year. However, as can be seen by the increase in the receipts from the stamp duty that is still being paid on properties over £500,000, house prices are being pushed up by the demand. The question has to be whether the increase in house prices is sustainable, or even affordable. With the government wanting to get more people onto the property ladder, it appears that what we are creating is a false ceiling that many younger people will once again struggle to break through.
“Affordability, especially when many incomes are suffering due to the pandemic, is a big issue, which could see the housing market stall once the stamp duty holiday is over.”
“The Chancellor’s spending review is unlikely to include anything further on housing, but stranger things have happened and, when receipts for stamp duty continue to flood into the treasury, an extension to the payment holiday may be on the cards. Whether that is good for the long term health of the market is another question?”
Earlier this year in March and April, residential transactions decreased by 50% as a result of the pandemic.