Private Finance comments on HMRC’s monthly property transactions for July 2020
21 August 2020
UK property transactions jump 14% over the last month, rising to 70,710 in July 2020, up from 61,780 in June 20201
Shaun Church, Director at mortgage broker Private Finance, said: “HMRC's latest data reveals the scale of the impact raising the Stamp Duty threshold has had on activity levels in the property market.
“The higher threshold has injected real impetus among consumers and buy-to-let investors. Many are rushing to purchase properties to exploit the financial incentives on offer.
“Despite the sharp recovery in transactions, there are clear headwinds which could suppress demand. High levels of uncertainty in the property market and the UK economy, compounded by huge demand from borrowers, all indicate that rate rises are on the horizon.
“Raising rates on higher LTVs would increase costs for first-time buyers - the group of consumers hardest hit financially by the pandemic - as they often rely on these products to make home purchases. Any savings gained by increasing rates on higher LTV products are likely to be passed on to those who represent less risky borrowing propositions.
“The Government urgently needs to start preparing for how it is going to maintain high levels of demand after the Stamp Duty threshold reverts to normal. A phased reintroduction of the lower threshold would ensure buyer activity does not suddenly fall off a cliff.”
1 Source: based on seasonally adjusted figures https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above
