In the last week, we were asked by a conveyancing body if we had any forward view on what the number of transactions would look like in September 2021, ahead of the final stamp duty holiday deadline in England and Northern Ireland.

Note that the Land & Buildings Transaction Tax (LBTT) holiday for Scotland ended on 31st March 2021 and the Land Transaction Tax holiday for Wales ended on 30th June 2021.

To move on, the results turned out to be quite interesting, so we thought we would share them with you.  But first, a bit of a history lesson…

UK Residential Transactions

The following chart shows the volume of UK residential transactions from April 2005 to July 2021 sourced from Her Majesty’s Revenue and Customs (HMRC).

Although the graph covers a wide timeline, there are three interesting facts to point out:

  • Oval A – shows the volume of transactions prior to the “credit crunch” (global financial recession of 2008), and our readers can see typical transaction volumes often exceeding 150,000 per calendar month.
  • Oval B – shows the 3rd highest month of transactions in the period, which was 171,000 in March 2016.  For those of you that remember, this is when the stamp duty rules with higher taxation amounts came in for second homes.
  • Oval C – shows the impacts of the recent stamp duty (or equivalent) holidays, where the 2nd highest month was in March 2021 with 174,000 of transactions.  This is when the Scottish stamp duty holiday ended and when England, Wales and Northern Ireland was originally supposed to end.
    • The highest month of any point in the period above was in June 2021 (at an unprecedented 213,000), when the stamp duty land tax tapered off from a maximum saving of £15,000 to a maximum saving of £2,500 (or £3,000 for first time buyers).
    • This lower saving is due to end at the end of this month.

Note that the last three months of transactions provided by HMRC are “provisional” volumes, but in our experience, these are usually quite accurate aside from the latest month.

“Inflight” Transaction Volumes

Our data currently shows the volume of inflight transactions in September 2021 is a massive 34% higher now than at the equivalent time at the beginning of June 2021.

Note that inflight transactions are defined as sales agreed that have not yet completed.

In theory, this suggests that the 213,000 of UK residential property transactions shown in June 2021 will rise to a whopping 286,000 in September 2021.

A key question is why is this the case given that the potential stamp duty savings are much lower than they were prior to the end of June 2021?

The answer to this question is relatively simple, in that the peak quarter for agreeing sales was Q2 2021, where the total volume was in excess of 430,000, and this was 10% higher than in Q1 2021.  There simply would not have been enough “runway” for all these Q2 sales agreed (and indeed some of the Q1 sales agreed) to complete by the end of June 2021.  So, the vast majority will have moved into completions in Q3 2021.

Are 286,000 of Transactions Possible in September?

For insiders in the property industry, you will note how busy June 2021 was and in particular the last week of it.  Our view is that the service suppliers that are required for progression and completion – such as conveyancers, lenders, surveyors and removers – were at or near capacity in June 2021.

As a result, we are, in our view, unlikely to see a 34% increase in transactions in September 2021 compared with June 2021.  But September still has the prospect of being higher than June.

But our friends in retail, telecommunications, financial services, utilities, automotive and removers and all of the other sectors where sales are directly affected by the volume of homemovers look out for increasing sales.  In order to get the most benefit from this opportunity, you can target those most likely to spend with you by using the TwentyCi data.


Source: TwentyCi