Estate agents noticed a significant drop in business as the full stamp duty holiday ended, highlighting the impact the tax break has had on the property market.
According to Andrews Property Group, new instructions fell by 7.1% in July compared to June and there was an 11% drop in instructions in June, compared to May.
What’s more, property viewings in July (3,425) were at a similar level to June (3,430) but more than 18% down on May figures (4,197), when buyers were rushing to complete before the full tax break ended.
Since 1 July, the stamp duty holiday has begun winding down, with the tax threshold reduced to £250,000. From 1 October the threshold will revert to £125,000.
The estate agent said buyer and seller activity was more subdued in July. Market conditions returned to some semblance of normality after the buyer frenzy seen for several months following the Government’s announcement in March that it was extending the full stamp duty holiday.
Summer holiday season
It wasn’t just the end of the full stamp duty holiday which has impacted the property market. Andrews also explained there were seasonal factors at play.
David Westgate, group chief executive, Andrews Property Group, said: “Although market activity has cooled in July, this isn’t solely down to the tapered stamp duty holiday.
“The summer months are typically quieter for property transactions as people head off on their holidays, and although many are staying at home this year, they are still taking time out to have some much needed downtime.
“Now the tax break is being phased out, we are likely to see less frenzied market activity for the rest of the year.
“However, demand remains strong and the fact that buyers can still enjoy a tax break up to a threshold of £250,000 should keep many interested in viewing and pushing through sales.
“While demand is there, we expect instructions and viewings to stabilise as we approach the end of September when the stamp duty holiday ends. If anything, we’re seen renewed vigour from buyers and sellers in August.
“The end of the furlough scheme on 30 September may be a bump in the road but perhaps not as severe as expected, as the scheme already started to taper in July and the economy is holding up.
“For now, buyers and sellers have a window of opportunity to push through sales while economic conditions remain reasonably stable.”
