Stamp duty receipts from residential homes in the second quarter of the year plunged by 32% from the same period 12 months ago, HMRC data shows.
The government tax body says the fall was driven by fewer transactions, a rise in the nil rate threshold and more generous first-time buyer relief put in place last September.
In former Chancellor Kwasi Kwarteng’s September tax-cutting mini-Budget, the zero percent stamp duty tax band was permanently raised to £250,000 from £125,000.
Also, the zero percent threshold for FTBs was raised to £425,000 from £300,000.
However, in current Chancellor Jeremy Hunt’s November Autumn Statement he said these reductions will only remain in place until March 2025.
HMRC says the number of liable residential transactions fell by 41% to 108,100 in the second quarter of this year, from the same period 12 months ago. This represents a 3% fall on the first three months of this year.
It also says that residential property receipts from April to June were 1% higher than in the previous quarter.
Quilter mortgage expert Karen Noyce adds: “A year-on-year dip in residential transaction data for June underscores the challenges facing the market, despite a 6% month-on-month uptick from May.
“These trends reflect the increasing affordability crisis in the property market that’s making home ownership an elusive dream for many.”
The official data also shows that for overseas buyers, receipts from transactions that incur a 2% stamp duty surcharge – introduced in April 2021 – plunged by 25% to £24m in the second quarter from the same period a year ago.
It adds that liable overseas buyer transactions fell by 10% to 18,200 from April to June, from a year ago.
Noyce says these figures highlight a “significant reduction in overseas property transactions”.
She adds: “There have been longstanding concerns among Londoners that parts of the city, particularly prime locations like Mayfair and Chelsea, are turning into ‘ghost towns’. With overseas buyers often treating these properties more as investment opportunities rather than homes, some argue this has been eroding the sense of community in these areas.
“Therefore, the decrease in such transactions, indicating that overseas buyers may be looking elsewhere, could potentially help unlock more properties for locals.
Noyce points out: “For FTBs, the property market continues to pose significant affordability challenges.
“Despite some relief provided by the increase in the nil rate threshold and more generous FTB relief, the significant decrease in transactions and rising prices continues to show homeownership out of reach for many.”
