The prospect of a general election and a hard Brexit may further hit property market, Naomi Heaton, chief executive of LCP has argued.
In an analysis of HMRC’s Residential Stamp Duty Land Tax (SDLT) statistics, LCP found there were 253,400 transactions in Q2, 2.9% less than that from the previous year and transactions on properties with the extra 3% stamp duty also dropped, falling by 2.7% from Q2 to reach 56,020.
Heaton said: “Tumbling sterling may help buoy up high value sales but the prospect of a general election and a hard Brexit may further rattle the property market.
“It is reported that PM Boris Johnson is looking at scrapping stamp duty for properties below £500,000 and reducing the top rate of 12%, a legacy of ex-Chancellor George Osborne, back to 7% – a welcome stimulus measure.
“It will be interesting to see if he also rolls back the proposed 1% additional levy for overseas buyers, now that Philip Hammond has been shown the door at No.11 and No.10 wants to show the world that the UK is open for business.”
There was an increase of 8.2% in stamp duty receipts and 6.8% in transactions in Q2 2019, compared with the previous quarter.
Heaton added: “There must have been a collective sigh of relief from the Exchequer.
“The modest uptick in Q2 does reflect the increase in market activity reported by LCP’s June residential index.
“However, overall tax take for the last 12 months is £8.4bn compared with £9.5bn in 2017, a fall of 11.5%. This can only be a cause for concern for the Exchequer.
“The number of people claiming First Time Buyers’ Relief in Q2 was 52,600, almost static compared with the previous year.
“However, from a peak of 60,800, numbers have fallen 13.5%, another disappointing result for the government as they endeavour to stimulate the first-time buying market.”