Residential transactions rose in January as buyers took advantage of the stamp duty holiday before its 31 March deadline, HMRC data has shown.
There were 121,640 provisionally estimated residential transactions in January 2021, which was 21.4 per cent higher than January 2020 but 2.4 per cent lower than December 2020.
“This year has started on a high for property transactions driven by buyers who flocked to the market to benefit from the stamp duty ‘holiday’, though there are early signs that sales volumes may have peaked at the end of 2020,” said Paul Stockwell, chief commercial officer at Gatehouse Bank.
“Even if Chancellor Rishi Sunak decides to extend the stamp duty discount or introduce a tapering period to cover those held up by backlogs in the process and are unable to complete their purchase before the deadline, the reintroduction of the charges at some point this year will affect sales volumes initially.
“However, there still remains a large pool of potential buyers who are reassessing their living conditions for life after lockdown, and looking for a larger property or more outdoor space.
“Although current concerns about infection could be holding back both buyers and sellers alike at the moment, this pent-up demand will eventually be released as the vaccine programme continues at speed, preventing transactions falling too significantly when stamp duty charges resume.”
David Whittaker, chief executive of Keystone Property Finance, said that the figures suggest home buyers who are unlikely to make the stamp duty holiday deadline are delaying applications until Sunak providers greater clarity over the future of the tax holiday.
“Despite the uncertainty, second properties are making up a significant proportion of the continued rising demand,” he said.
“Data from Hamptons International reveals second home sales increased by 58 per cent in January 2021 compared to the same month last year.
“This follows a period of buoyancy in the buy-to-let market as landlords look to expand their portfolios, while taking advantage of an increasing number of buy-to-let products on the market.”