Property sales slowed in May
There were an estimated 114,940 residential transactions last month, 3.9% lower than April but 138.2% higher than in May 2020 when the property market was at a standstill due to the Covid pandemic.
The stamp duty holiday, introduced last year to help buyers financially hit because of Covid, was originally due to end in March. The deadline has since been pushed back to 30 June.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The drop in sales in May isn’t a huge surprise: we tend to see this pattern when a tax change distorts the market.
“Although the stamp duty holiday deadline was postponed to the end of June, it wasn’t announced until the beginning of March. It usually takes just over three months to go from agreeing a sale to completing on it, so there’s a good chance that most of these sales would have been agreed in February, when buyers assumed they would be paying stamp duty in full.”
The stamp duty deadline extension means experts expect a bumper June.
Andrew Southern, chairman of property developer Southern Grove, said: “Buyers are behaving with a greater sense of urgency than ever as they try to get their purchases over the line before each stamp duty holiday deadline.
“Transactions volumes will likely move higher again in June and then again in September due to the distorting effects of these cliff edges, before the tax break vanishes altogether.”
Iain McKenzie, chief executive of The Guild of Property Professionals, said: “Residential sales are down slightly from the heights seen earlier in the year, but make no mistake, the property market is showing no signs of returning to humdrum normality.
“There is still a huge amount of pent-up demand from buyers, and the limited supply of housing means that prices are higher than ever.
“For many buyers, the impending end of the stamp duty holiday could leave them feeling like they’re in the last chance saloon – and it’s possible that we could see activity surge again towards the end of the summer.”