The Treasury has taken £4.2bn in stamp duty payments so far this year, according to analysis of HMRC receipts by Coventry Building Society.
In May, stamp duty receipts were £652m, which was down by around a third on April’s figure but 81% higher than in May 2020.
The Office for National Statistics reported earlier today that residential property sales reached their highest May total for seven years last month as buyers rushed to take advantage of the stamp duty holiday.
There were 103,100 residential sales in May on a provisional and non-seasonally adjusted basis, which is an increase of 123.4% year-on-year, although direct annual comparisons are difficult due to the closure of the housing market during lockdown last year.
Compared to April, May’s residential transactions were 8.7% lower on a non-seasonally adjusted basis.
Coventry Building Society head of intermediary relationships Jonathan Stinton says: “With HMRC’s revenues still going strong in the wake of the stamp duty holiday, higher value properties, second homes and rental properties are all clearly still a big part of the market.
“And the so-called ‘pandemic boom’, which has seen house asking prices hit record levels across every region of Great Britain will be having an impact on the taxman’s coffers too.
“If the taxman is still getting a healthy pay day from stamp duty even with this holiday, perhaps keeping the threshold high would help to normalise the market and take at least some of the financial burden off of the average homebuyer.”
Shawbrook Bank managing director of property finance John Eastgate says: “Buyers who have managed to get their deal across the line will be breathing a sigh of relief that they’ve got in before the deadline for the stamp duty holiday to end.
“Yet, it’s unlikely that we’ll see sales fall off the much prophesied cliff edge next month.
“The market remains buoyant and buyers confident in the deals that they can achieve.
“As a decision to raise the base rate by the Bank of England looks to become more likely, it’s possible we’ll see buyers try to secure favourable rates ahead of any increase.
“Remortgaging levels are therefore also likely to receive a boost as homeowners and investors choose to fix and secure another few years of low rates.”
Assetz Group chief executive Stuart Law is anticipating a short-term lull in activity as the stamp duty holiday effect begins to wear off.
But he says: “We don’t expect this to last long with HMRC data hinting that we may well have moved to permanently higher levels of transactions than seen in the years prior to the pandemic.
“Many believe cheap mortgage deals will continue to feed this appetite as long as interest rates remain low, but this is only one part of the puzzle. “Rising house prices are also fuelling market demand as those who have been thinking about moving for some time are likely now keen to take action now before their dream home with more outdoor space becomes too expensive.
“Putting off a move by even a few months could make all the difference as we expect prices to rise by 8-10% in both 2021 and 2022.
“Expectations that wages will go up in line with increasing inflation over the longer term could also help drive activity, as well as those looking at the investment opportunity while the market is hot.
“The fear of missing out is very much in play here and the combination of these factors could drive record levels of transaction activity as we approach the third quarter of the year, possibly 40% higher that pre-pandemic years as is the case in Q2 already.”
