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UK house sales plunge by 52% after stamp duty holiday ends

UK house sales plunge by 52% after stamp duty holiday ends

House sales in England and Northern Ireland reportedly fell by more than half during the initial few weeks following the end of the government’s prolonged stamp duty holiday, resulting in the slowest October property market in over a decade.

After a groundbreaking high earlier in the year, the number of sales across UK fell by 52% in a month to hit 76,930 in October, as thousands of homebuyers tried to rush to finalize their purchases before the end-of-September stamp duty holiday deadline issued by the government, which applied to buyers in the biggest market, England and Northern Ireland.

In other places, property-purchase tax breaks had already been phased out: in Scotland, the deadline was 31 March this year, while in Wales, the deadline was 30 June.

As per HM Revenue and Customs, in October, UK house sales were 28% lower as compared to the same month last year.

HMRC stated that following ‘substantial forestalling activity’ from homebuyers in September, an anticipated yet noticeable drop  was witnessed in sales in the following month. The term ‘forestalling’ refers to taking proactive steps to avoid an impending event, which in this case was the stamp duty holiday's phase-out. In England and Wales, the pre-pandemic threshold of £125,000, where tax begins, was restored on October 1st.

The HMRC data highlights the housing market's rollercoaster nature over the last 18 months or so. It indicated that house sales in Q2 of 2021 reached their greatest quarterly figure since record-keeping officially started to be kept in this manner in 2005, also hitting their largest total for any three-month timeframes since 2007.

Many analysts predicted that the market would go into winter slumber as a result of the figures.

The supposed shortage of properties for sale is one factor which might have pushed housing prices high. The Royal Institution of Chartered Surveyors stated earlier this month that an overall lack of new properties being advertised for sale continues to force property prices up.

As per reports, despite an increase in prospective buyer queries, realtors only had 37 properties on their records on average.

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