Figures for the number of transactions on residential properties that were valued at £40,000 or above were 13% higher in the period from June to September 2016 than in the previous quarter, according to official data.
HMRC figures for the third quarter of 2016 showed that there were 235,000 residential property transactions that were liable for stamp duty – 13% higher than the last quarter and 1% higher than the previous year – and a first sign that the 3% surcharge on additional properties, such as second homes or buy-to-let properties, is having an impact.
When it comes to the 3% stamp duty surcharge, HMRC estimates that so far in 2016/17 there have been 86,400 transactions, accounting for £1,288 million, of which £670 million is attributed to the additional 3% element.
The number of residential property transactions with a value of less than £250,000 from June to September 2016 was 12% higher than the previous quarter, and 4% higher than the third quarter of 2015. HMRC says that this is linked to the introduction of higher rates for additional properties in April 2016, pointing out that the increase in rates has led to additional properties sold for less than £125,000 becoming liable for stamp duty.
Those with a value between £250,000 and £500,000 were 14% higher than the previous quarter, but 3% down on the third quarter of 2015. Similarly, figures for transactions valued at more than £500,000 were 15% up on the previous three months, but 4% lower than the third quarter of 2015.
The number of residential property transactions that were not liable for stamp duty – usually because they fall under the £125,000 threshold – was 12% lower than the previous quarter and 32% lower than in the third quarter of 2015.
“Demand for affordable housing outstrips supply”
Jeremy Duncombe, director of the Legal & General Mortgage Club, says: “Given the turbulence in Britain’s political landscape in the past six months, it’s reassuring to see that today’s statistics have not shown a drastic drop in transaction numbers.
“It is comforting to see that the number of property transactions under £250,000 is continuing to rise – even if higher value property transactions have declined year on year. At the top end of the market, stamp duty increases and market uncertainty have led to a slowdown above the £1 million mark. At this level, homeowners are having to carefully weigh up the significant costs of moving.
“Despite a generally positive set of numbers, the structural challenges in our housing market remain. The demand for affordable housing continues to overwhelmingly outstrip supply.
“Until this issue is tackled head on by our government and the house-building industry, prices will outstrip wages and remain unaffordable for many. Only when we balance supply and demand, will we start to see our housing market revert back to a healthier, more affordable state, leading to sustainable, increasing transaction numbers,” he adds.