Property sales plummet after stamp duty changes, says HMRC
The number of UK properties sold fell by 45% between March and April as stamp duty changes came into effect, according to official figures from HM Revenue & Customs (HMRC).
Since 1 April 2016, those buying an additional property, such as a second home or a buy-to-let, have been required to pay an additional 3% stamp duty surcharge. This led to a rush to bring forward property purchases before the surcharge was introduced, and March saw a record high of 164,400 transactions.
By contrast, just 94,370 properties in total were sold in April, and the number of residential properties sold - 84,280 - was the lowest for three years. Compared to April last year, the number of transactions was down by 14.5%.
The stamp duty surcharge for second homes was announced as part of Chancellor George Osborne’s 2015 Autumn Statement. It is expected to boost Treasury coffers by some £1 billion by the year 2021, but there have been many critics of the change, who argue that the measure will damage investment in property.
Andy Sommerville, director of Search Acumen, said: ‘A 45% month-on-month drop in transactions is a powerful testament to how Government reform can alter forecasts and sway public attitude.
‘Whilst the spike in March more than makes up for the fall in April, what is worrying is that this dip is not just the consequence of buy-to-let landlords and second homeowners clearing transactions ahead of April. It’s also the result of people trying to find their bearings, preferably even trying to stay away from the market as Brexit speculation grows louder.
‘The Chancellor, in efforts to sway voters to stay, has predicted economic shock and plummeting house prices in the event of the UK leaving the EU, while others believe falling house prices could be a good thing. Either way, the uncertainty is stagnating the market. This is likely to continue well into June, with transactions picking up once there is greater clarity on the UK’s direction.’