1 August 2023
If you are covering the quarterly stamp duty land tax statistics, please see the following comment from Karen Noye, mortgage expert at Quilter:
"The Q2 2023 stamp duty statistics reveal a mixed bag for the UK's property market. On one hand, residential property receipts rose 1% compared to the previous quarter, indicating a slow but steady recovery. However, the 32% year-on-year reduction compared to Q2 2022 demonstrates a significant slump, largely driven by a combination of fewer transactions, an increased nil rate threshold to £250,000, and a more generous First Time Buyers’ Relief initiated in September 2022.
"These developments could prove troublesome for the government, considering the potential impact on its stamp duty revenue. Moreover, a year-on-year dip in residential transaction data for June underscores the challenges facing the market, despite a 6% month-on-month uptick from May. These trends reflect the increasing affordability crisis in the property market that's making home ownership an elusive dream for many.
"Meanwhile, the decrease in Non-resident Stamp Duty Land Tax transactions and receipts from transactions incurring the 2% surcharge for overseas buyers may be seen as a positive change by some. NRSDLT transactions dropped by 33% from 2,400 in Q2 2022 to 1,600 in Q2 2023, indicating that fewer overseas buyers are purchasing UK properties. There was also a quarter-on-quarter decrease in NRSDLT transactions of 24% from Q1 2023, signalling a continuing trend. In addition, receipts from transactions incurring the 2% surcharge fell by 25% from £32 million in Q2 2022 to £24 million in Q2 2023. There was also a quarter-on-quarter drop from £32 million in Q1 2023, underscoring the significant reduction in overseas property transactions.
"There have been longstanding concerns among Londoners that parts of the city, particularly prime locations like Mayfair and Chelsea, are turning into 'ghost towns'. With overseas buyers often treating these properties more as investment opportunities rather than homes, some argue this has been eroding the sense of community in these areas. Therefore, the decrease in such transactions, indicating that overseas buyers may be looking elsewhere, could potentially help unlock more properties for locals.
"Regardless for first-time buyers, the property market continues to pose significant affordability challenges. Despite some relief provided by the increase in the nil rate threshold and more generous First Time Buyers’ Relief, the significant decrease in transactions and rising prices continues to show homeownership out of reach for many."
