So today I thought we’d take a look at sales and the conclusion of the Stamp Duty ‘holiday’ and essentially the number of transactions that are likely to complete the end of the tax break at the end of June this year.
So what can we see currently? (Comparisons are based on 2019 numbers rather than 2020)
Well firstly we’re seeing that the boom that began last summer is showing signs of slowing down and getting back to levels of 2019 – May 2019 to May 2021. Now this isn’t entirely bad news! Volumes of sales are still higher than ever, but they are starting to slow down. If we look at the monthly volume of sales agreed since January 2016 and then rank them in order of sales agreed, we see the below:
You’ll see in this that there’s only 2 months of these 10 that were pro-Covid and that the rest are as a direct result of the pandemic and essentially the Stamp Duty holiday that was first introduced in July last year. March and April this year (2021) have been the highest months of sales being agreed since our records began in 2008.
May 2021 however, although not quite finished, TwentyCi are predicting sales volumes to be around 142,000. Now although this is quite a slow down on March and April this year, it’s still 24% increase on May 2019.
Now, as I’ve mentioned previously, current transaction lengths are at around 22 weeks throughout the UK from a sale being agreed to completion – essentially 5 months. So, put another way, sales being agreed today are not likely to complete until mid to late October.
So, what does this mean for the current Stamp Duty exemptions? Well, to put it quite simply, around 56% of all sales that are currently progressing are likely to miss out on the current exemptions – remember there’s a 2 stage phasing out of the holiday. This is 354,000 properties/sales!
Any buyer now entering the market, or even those entering the market in the past couple of months, really should be of the understanding that they will not be benefitting from the Stamp Duty break – especially that for the end of June. And yet, we’re still looking at a top 10 month for May!