The end of a watered down tax relief on home sales has caused the property market to bottom out, according to official figures released today.
Research by HMRC found property sales shrank around 52 per cent over the last month, dropping to 76,930 in October, down from 160,220 in September.
The looming end of the tapered stamp duty holiday in October prompted prospective buyers to rush to snap up homes to capitalise on the financial benefits of the relief before it finished.
Nick Leeming, chairman of Jackson-Stops, said: “The stamp duty holiday very much shapes today’s figures.”
“We saw a slower market in October when juxtaposed with the volume of transactions in September, which represented a buyer acting with breakneck speed to capitalise on the end of the SDLT holiday.”
Experts have suggested elevated property transactions are being primarily driven by the Covid-19 crisis engineering a sudden shift in Brits’ housing preferences, causing demand for larger homes with access to green space to sky rocket.
However, the bottoming out of the property market in the first month when no stamp duty relief has applied suggests those assessments could be misplaced.
Chris Sykes, associate director at Private Finance, told City A.M. that a “lack of housing stock” has triggered a sharp pull back in home sales.
Buyers are struggling to find appropriate homes on the market due to a lack of variety, causing prospective buyers to wait until more stock becomes available.
Homeowners are also reluctant to list their properties due to having few choices to buy after a transaction has completed.
Soaring house prices are also putting some Brits off from buying homes now, opting instead to wait until the market cools.
Sykes told City A.M. one client recently bid £1.1m for a property listed for £1.4m after seeing it had been listed at a lower price recently and was “laughed out of the room”.
According to building society Nationwide, UK house prices are 9.9 per cent higher than they were a year ago.