HMRC says stamp duty tax surges by 19% to £14bn

Stamp duty tax receipts in England surged by 19% between April and November to £14bn – an increase of £2.2 billion compared to a year ago, HMRC has revealed.

In April, the levy was ‘dramatically higher’ after the stamp duty holiday ended in September 2021.

In November’s Autumn Statement, Chancellor Jeremey Hunt announced the reinstatement of stamp duty cuts until March 2025, rather than making them permanent as was proposed by Kwasi Kwarteng in his budget.

This decision led to an immediate boost in tax receipts.

HMRC is predicting that December will bring another influx of stamp duty revenue because of the property purchases being completed before Christmas.

Also, HMRC says that residential property transactions in November increased by 12% compared to the same period last year.

There was a 4% increase in non-seasonally adjusted transactions of 114,200.

‘Buy property and move up the housing ladder’

Gareth Lewis, the commercial director of property lender MT Finance, said: “Despite many wider economic challenges, consumers seemingly still want to buy property and move up the housing ladder.

“While this was a fairly simple process in a low interest rate environment, this has changed with consumers needing to get accustomed to higher mortgage rates, as well as the soaring cost of living.”

He added: “The effect of these and whether they will negatively impact transaction levels, as well as people’s desire to move, has yet to be seen in the official numbers.

“Only the new year will reveal whether that is the case.”

‘Transaction figures coming out of HMRC remain surprisingly strong’

Frances McDonald, a research analyst at Savills, said: “In light of the economic backdrop, transaction figures coming out of HMRC remain surprisingly strong, in part reflecting the urgency of buyers to lack into mortgage deals agreed before the rate rises of the past three months.

“However, lead indicators from the RICS, Bank of England and mains listings agencies, suggest a somewhat lower turnover market next year due to limited mortgage product availability, along with high rates and stretched affordability.

“Looking ahead to the early part of 2023, our latest buyer and seller survey suggests that needs-based buyers are likely to be the most active buyer types whilst mortgage rates remain high and affordability constraints more discretionary and lifestyle moves.

“But levels of commitment to moving amongst those looking to ‘right-size’ their homes, whether upsizers or downsizers, rise significantly over the next year or two.”

‘Transaction numbers are holding up’

Mark Harris, the chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers are holding up, particularly as we would expect things to start to slow down as we approach Christmas.

“Buyers with good mortgage offers are keen to complete before they expire, while others have to move for whatever reason, even if the market is more difficult than it has been.”

He added: “Even though the Bank of England hiked the base rate by half a point as expected last week, fixed-rate mortgages continue to move gently downwards, with five-year fixes breaching the 4.5% barrier and expected to go below 4% in the new year as the cost of funds falls, servicing pressure subsides, and lenders attempt to originate new business.”

‘Transactions are the better measure of market health’

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “As usual, it is transactions which are the better measure of market health than more volatile property prices.

“In fact, prices have held up better than we might have feared given recent cost-of-living and mortgage rate uncertainty.

“Although these transaction figures are a little dated, reflecting what happened a few months ago, activity is clearly recovering from the shock of the mini-Budget a few months ago now that rates have begun to settle.”

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