Stamp duty receipts fell 4% to £2.4bn in the final three months of last year compared to the previous quarter — and is 25% lower than the same period a year ago, the latest data from HMRC shows.  

The number of residential property transactions in the fourth quarter of 2023 “was marginally lower”, less than 1%, than in the previous quarter, according to the government department.  

It adds that home deals liable to the tax fell by 3% between the third quarter of last year and the final quarter of 2023 — from 131,800 to 127,600.  

The body says that the levy applied to 89% of all housing transactions in the final three months of last year, which is 1% down from the third quarter of 2023, and a 2% decrease from a year ago.  

The data comes as HMRC also released figures today that show home transactions in December fell 18% to 80,420, compared to a year ago. This number is 1% lower than the previous month.    

Quilter mortgage expert Karen Noye says: “New data from HMRC shows that the end of 2023 witnessed a notable decrease in residential transactions, a trend attributed to the dampening effects of higher interest rates and a general sense of caution in the property market as a response to the cost-of-living crisis.   

“Higher rates made the prospect of buying a home less attainable for many, leading to an 18% year-on-year decline in transactions by December 2023. The housing market has therefore been subdued, with activity slowing down considerably.  

“This has had a knock-on impact on the amount of tax the government is taking in from stamp duty.    

“Reigniting the property market therefore might be something the government is keen to do and recent rumours of the return of 99% mortgages could be its attempt to get more first-time buyers into the market which helps boost transactions further up the chain too.”  

Evelyn Partners financial analyst Adrian Lowery points out: “Stamp duty transactions and revenues are distorted by regular tinkering with the stamp duty regime and by the vagaries of the property market, and have been up and down over the last few years.”  

He adds: “A flagging housing market and a sluggish electorate could well prompt the Chancellor to look at extending stamp duty reliefs at the spring Budget on 6 March.   

“That could take the form of an extension to the thresholds at which stamp duty is paid, a reduction in the rate of stamp duty or another temporary stamp duty holiday.    

“If Jeremy Hunt does not receive the good news he is hoping for on the public finances in the coming weeks, giving him the fiscal headroom he needs for a big giveaway on something like income tax, then it’s more likely he will look at relatively inexpensive cuts to more targeted levies like stamp duty or inheritance tax.”