Looming stamp duty deadlines have helped to fuel a sharp spike in property deals according to data from HM Revenue and Customs.
The latest HMRC figures show there were 96,330 residential property transactions in December, 19 per cent higher than December 2023 and up 3 per cent on the previous month.
Property experts have warned that stamp duty changes this spring could spark volatility, triggering a jump in house sales in early 2025, followed by a “weaker” period.
At the end of March, a temporary “nil rate” threshold on stamp duty for first-time buyers will drop back to £300,000, from £425,000 currently, meaning those buying homes over £300,000 will pay extra tax when the deal is done.
Nick Leeming, chair of estate agent Jackson-Stops, said: “The rise in transactions in December can largely be attributed to the pending stamp duty deadline in March.
“No doubt buyers across London and the South East in particular would have been pushing for deals to get across the line given the traditionally higher tax rates in this part of the country.
“This is evidenced across our network with the number of new applicants far outweighing new instructions in December in Bury St Edmunds, Newmarket, Dorking, Northampton, Reigate and Sevenoaks.”
Nathan Emerson, chief executive of estate agents body Propertymark, said: “Stamp duty changes across England and Northern Ireland, more competitive mortgage deals, easing financial pressures and higher house prices are all contributing to higher demand and growth within the housing market.”
London estate agent Jeremy Leaf, said: “Completed sales are a much better indicator of market health than more volatile house prices.
“However, these figures reflect activity mostly from around three to four months ago but of mortgaged and cash sales, so demonstrate considerable market resilience at a time of pre- and post-Budget uncertainty.”
The HMRC figures came as the latest report from the Building Society Nationwide showed the annual rate of house price growth slowed to 4.1 per cent in January, from 4.7 per cent in December. The average house price rose to £268,213.
Nationwide said prices have slowed but are continuing to rise and affordability remains stretched by historic standards.
Economists forecast that stamp duty changes across England and Northern Ireland, more competitive mortgage deals, and easing financial pressures were expected to drive even greater demand and faster growth.
The report said prospective buyers on average salaries looking to purchase a typical first-time-buyer property with a 20 per cent deposit face paying a monthly mortgage payment equivalent to more than a third (36 per cent) of their take-home pay.
“The housing market continues to show resilience despite ongoing affordability pressures,” Robert Gardner, chief economist at Nationwide, said. “While there has been a modest improvement over the last year, affordability remains stretched by historic standards.”
Nationwide found the rate of ownership among younger age groups particularly those aged 25-34 and 35-44, remain well below their 2004 peaks. Ownership amongst the youngest group has been steadily improving over the past decade to 45 per cent, compared with 36 per cent in 2014, though still below the 2004 peak of 59 per cent.
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