September saw huge spike in home sales as Stamp Duty holiday ended
Property sales rocketed to 165,720 in September – up a massive 59.7% from August and 67.3% higher than a year earlier, according to HM Revenue and Customs.
It was the highest level of September sales since they were first measured in this way in 2005 and significantly higher than any other September in the past decade.
The spike came as buyers rushed to beat the end of the Stamp Duty deadline which finished at the end of the month.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said of the figures: “Sales were more than two thirds higher than a year earlier, but they were still below the peaks in March, when the stamp duty holiday was first due to come to an end, and June, when the tax relief was cut substantially. However, by this stage, the stamp duty saving wasn’t much to write home about: the most buyers could save was £2,500.
“The fact we saw a surge at all shows the psychological power of the tax break. For those who had been locked in an incredibly frustrating housing market for months, and may have initially been aiming for one of the earlier deadlines, this was a final chance to at least get a small saving on the painful and expensive process of buying a house.
“We expect to see sales slow from this point, reflecting the fact that agents reported a drop in buyer interest in August and a leveling off in September. We’ve also seen six successive months of drops in the number of properties coming to the market, so even if there were plenty of keen buyers, the property drought would keep a lid on sales.”
Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “The stamp duty reduction alone has not been responsible for whipping up the enormous demand we have seen since last summer, but it has encouraged transactions to bunch uncharacteristically into several big peaks.
“It will likely now equally cause a slump in sales in October, like the one witnessed in July when the most generous stamp duty savings were trimmed.
“Low supply and continued high demand, particularly driven by buyers searching for more space, will almost certainly keep prices high, but transactions look likely to settle back down to historic norms while stamp duty costs remain a major financial obstacle for many buyers.”