• New HMRC figures set out the scale of the slump in housing market activity during lockdown (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904092/Quarterly_SDLT_2020Q2_Main.pdf)
• Residential property transactions were down 39% in Q2 2020 compared to Q1, and 45% lower than a year earlier
• Stamp duty receipts from residential properties plunged 42% year-on-year, from £1.88 billion in Q2 2019 to £1.09 billion in Q2 2020
• Chancellor Rishi Sunak announced a radical overhaul of stamp duty earlier this month in a bid to stimulate the market
Tom Selby, senior analyst at AJ Bell, comments:
“Given the unparalleled uncertainty caused by the COVID-19 pandemic and subsequent lockdown, it is no surprise to see the number of people buying and selling houses fell off a cliff between April and July.
“While we are perhaps becoming numb to double-digit falls not just in sectors but the growth of entire economies, a near-50% drop in housing activity year-on-year remains a staggeringly sharp slowdown.
“In this context it is entirely unsurprising Chancellor Rishi Sunak used his mini-Budget to put rocket boosters under the market by hiking the stamp duty threshold to £500,000.
“Clearly a cut in the cost of buying a house should spur demand in the short-term, although given the continuing uncertainty facing many people – particularly as the Government’s furlough scheme winds down – the impact this intervention will have remains far from certain.”
