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Sales of homes halved in October after end of Stamp Duty holiday
The fall in transactions was expected after the spectacular September figures, as the market now settles into a new normal
Property sales plummeted last month, almost halving between September and October, following the end of the Stamp Duty holiday.
According to HM Revenue & Customs, property sales fell to 85,090 in October – down 48.4% from September, and down 30.1% from a year earlier.
It was the slowest October since 2012 but, despite the drop, sales over the 2021/22 tax year so far are higher than any other year for the past decade (868,040), according to the official figures.
Sarah Coles, personal finance analyst, Hargreaves Lansdown: “There’s nothing to frighten the horses in these figures. We always see drops like this after the end of a tax break, and we tend to see buyers hunker down for winter, so the combination of the two was always going to mean a quieter few months.
“The monthly drop looks spectacular, as sales almost halved, but this was from an enormous peak, created by the final stamp duty holiday deadline. A major chunk of sales we would otherwise have expected this winter, were rushed through in time for the deadline at the end of September.
“We knew this fall was coming, and we’re not expecting it to pick up again in the immediate future. Usually after a spike like this, we get a quieter period. Add in the fact that we usually get sales tailing off at this end of the year, and it’s fair to expect a degree of hibernation. This will be exacerbated by the fact that the number of properties coming to the market has fallen for seven months in a row, and the average agent has just 37 properties on its books, so even if people are keen to buy, there’s hardly anything on the market.”
Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “With the tax incentive now completely removed, we’ll see the back of these peaks and troughs as transactions settle into a more consistent pattern.
“This fall in sales signals that there is unlikely to be any long-term dividend for transactions as a result of the stamp duty holiday. House sales will likely return to the historic norms seen before the pandemic as the cost of moving becomes a factor again.”
