Property Watch – October 2022 UK residential property transactions

The graph below shows the UK housing market transactions for the years 31 October 2021 and 2022 as reported by HMRC through Stamp Duty Land Tax (SDLT) reporting.

* August to October 2022 figures are provisional due to delays in collecting all relevant SDLT reporting.

The graph above shows:

• The October 2022 residential property transactions amounted to 110,850 transactions which was 29.1% up from October 2021 but 3.1% down from September 2022.
• The October 2021 transactions were depressed due to the end of the £250k SDLT holiday during COVID ending in September 2021 and people advancing their transactions to benefit from this relief, which explains the significant difference between the years.
• Not shown in the above graph, but the October 2022 transactions were higher than the October 2019 (pre-COVID) transactions by 3,750 transactions (3.5% higher).
• The Bank of England base rate remained at 2.25% throughout October 2022 (0.1% in October 2021).

Key points to note:

• The transaction spikes in March 2021 and June 2021 were a result of the expected and extended end to the £500k SDLT holiday enacted in response to the COVID-19 pandemic.
• The September 2021 transaction spike was a result of the end of the £250k SDLT holiday enacted in response to the COVID-19 pandemic.
• The September 2022 transactions in the above graph are 1,980 higher than those reported in our September 2022 issue of this circular (which can be viewed here: ballardsllp.com/insights/property-watch-september-2022) this is a result of more data being collected throughout the last month to support the transaction data reported.

Autumn Statement

The Chancellor, Jeremy Hunt, announced the Autumn Statement on 17 November 2022. Announcements that will affect landlords and property owners include:

• From 1 April 2025 the recently announced increases to the SDLT nil rate threshold (3% threshold for second home owners and corporate entities) to £250,000 and £425,000 for certain first-time buyers will be abolished and these thresholds will revert to their historic rates (£125,000 and £300,000 respectively).
• The capital gains tax annual exempt amount for individuals will reduce from the current £12,300 to £6,000 from April 2023 and then to £3,000 from April 2024 meaning more tax will be payable on property gains.

There is often a delay in the housing market to respond to wider economic trends. As the cold weather starts to bite and homeowners really start to feel the pressure of the economic downturn and increased borrowing costs, one would expect a downturn in the reported housing transactions in the coming months.

Ballards LLP’s property team has extensive experience acting for property-related businesses and can assist investors, developers, and associated trades with all financial property matters including; tax-efficient structuring, SDLT planning, Annual Tax on Enveloped Dwellings planning and reporting, and any other financial matters associated with property ownership. We act for all sizes of businesses.

If you would like to find out how we can help please contact Martin Adams at martin.adams@ballardsllp.com or on 01905 794 504.

To view past editions of this circular and other topical tax and business insights please visit: ballardsllp.com/insights/

All data is © HM Revenue & Customs.

Disclaimer. This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated to us.