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Stamp Duty Holiday Boosts Sales

Sales of homes below the stamp duty threshold in England and Wales rose sharply in the last three months of 2009, research has shown.

Transactions in areas where the average price was below £175,000 increased by 10.2% compared with the previous quarter, said the Acadametrics report.

But sales in areas where the average property price was above £175,000 only rose by 2.2% over the same period.

The temporary stamp duty holiday ended on 1 January.

This pushed the threshold back down to £125,000, having been set at £175,000 since September 2008.

The concession was aimed at stemming the rapid slump in the property market.

Property prices

The Council of Mortgage Lenders (CML) has previously said that the tax break was of greatest benefit to buyers who lived in the South East of England, but outside London.


[Stamp duty and interest rates add] layers of complexity in trying to anticipate what the market might do next

Peter Williams, Acadametrics
But the Acadametrics report found that sales spiked on particular types of properties.

In the South East and South West regions of England there was growth of between 8% and 13% in the purchase of flats and terraced properties in the final three months of 2009, compared with the previous quarter.

The larger, more expensive properties in the same areas saw a decline in the number of properties sold of between 1% and 4%.

On a regional level, the areas with the biggest fall in transaction numbers over the same period were Buckingham (down 13%), Herefordshire (down 11%) and Nottingham (down 8%).

Areas with an increase in property transactions included Leicester (up 24%), Thurrock (up 23%) and Staffordshire (up 20%).

Latest rise

The research showed that over the last 12 months in England and Wales, prices of terraced properties increased by 5%, flats increased by 4%, semi-detached properties increased by 2%, but the prices of detached properties fell by 1%.

In January, the average price of all residential property transactions completed in England and Wales in January was up 0.7% compared with the previous month - the seventh monthly rise. Year-on-year the rise was 5.4% in January.

"It is hard to draw firm conclusions, given that the monthly increase had been slowing since September and there are strong regional variations in the recovery story," said Peter Williams, chairman of Acadametrics.

"Without doubt, year-end activity was heightened by the anticipated end-of-year closure of the stamp duty holiday for properties up to £175,000.

"This factor, along with historically low interest rates for some borrowers and much else, adds layers of complexity in trying to anticipate what the market might do next."


 

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