A 92% surge in takings despite the stamp duty holiday freeing many buyers from having to pay the tax has prompted some in the industry to question whether a return to previous thresholds is necessary at the end of September.
Total stamp duty receipts in the second quarter of this year were 92% higher than the same period in 2020 at £2.85bn, according to HM Revenue & Customs figures.
Receipts were also 12% higher than Q1 of 2021.
The number of residential property sales increased by 9% between the first and second quarter of this year to reach 365,700.
Year on year growth was 175%, however 2020 figures were weighed down by the near-closure of the property market during the first lockdown, which was followed by a boom in activity after the stamp duty holiday was introduced by the chancellor in July last year.
The scaling back of stamp duty relief on June 30 this year also resulted in a surge in transactions as buyers rushed to beat the deadline.
Non-residential transactions in Q2 2021 were 12% higher than in Q1 2021, and 79% higher than in Q2 2020.
Coventry Building Society head of intermediary relationships Jonathan Stinton says: “With the Stamp Duty holiday still in full swing in Q2, it’s clear that the market for higher value properties, second homes and rental properties has also been very strong this quarter.
“This begs the question – does stamp duty need to be reinstated as it was before? The taxman is clearly still earning a very healthy amount from the property tax, so perhaps some of the financial burden could be lifted for the majority of homebuyers?
“Perhaps it’s time to rethink the issue of property tax rather than reverting to business as usual.”
Smartr365 chief executive Conor Murphy says: “The stamp duty holiday lit up what was an already heated property market and today’s encouraging findings reinforce just how instrumental this initiative has been in creating the ‘busiest H1 on record’.
“The stamp duty holiday has positioned the property market as a key driver in the UK’s economic recovery and thankfully enabled many in the industry to retain their jobs.
“Most remarkably, the break has created a golden opportunity for both first-time buyers and second-steppers to move onto or up the property ladder, when they otherwise would not have had the financial means to do so.
“However, with just eight weeks until the tax break draws to a close, the government should now plan how it will support buyers in its wake. “Permanent reductions to stamp duty will help ensure homeownership remains an accessible venture and that the market retains its buoyancy come the end of September.
“It is crucial that this period of greater accessibility and heightened demand is not just a flash in the pan.”
Masthaven director of intermediaries Rob Barnard says: “The stamp duty holiday has been one of the major driving forces behind the high levels of activity in the housing market for over a year now.
“Although it’s positive to see the market thriving, the industry needs to brace itself for yet another period of change.”
He says that prices have continued to rise since June’s step down in the stamp duty relief on offer, despite the fact many borrowers have been badly hit by the pandemic.
“More than ever borrowers are likely to need additional support and guidance from lenders and brokers.
“September will also be a critical month as the furlough scheme comes to an end, potentially leaving some customers in financial difficulty.
“It is important lenders collaborate with brokers to offer customers the right guidance and inform them about the broad spectrum of products on offer, so they’re not locked out of the market.
“The property industry has already proven its mettle through the challenges of lockdown and further collaboration is going to be vital on the road ahead.”
