Latest property transaction statistics show an increase in the number of transactions completed in the UK compared to last year.
HMRC issues monthly estimates of the number of residential and non-residential property transactions in the UK and its constituent countries with a value of more than £40,000.
The figures are based on HMRC’s Stamp Duty Land Tax (SDLT) database, which records the information submitted by property purchasers on the SDLT Return, and on transactions notified to Revenue Scotland and the Welsh Revenue Authority relating to Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively. (LBTT replaced SDLT in Scotland on 1 April 2015. LTT replaced SDLT in Wales on 1 April 2018.) The latest figures are now available and information relating to these can be found here.
Whilst the seasonally adjusted residential transactions have remained stable, seasonally adjusted non-residential transactions have risen for the second consecutive month in March 2019. The headline figures:
- The provisional seasonally adjusted UK property transaction count for March 2019 was 101,830 residential and 11,210 non-residential transactions.
- The provisional seasonally adjusted count of residential property transactions increased by 1.4% between February 2019 and March 2019, and is 6.8% higher than March 2018.
- The provisional seasonally adjusted count of non-residential property transactions increased by 8.9% between February 2019 and March 2019, and is 9.7% higher than March 2018
HMRC points out that SDLT transactions are presented by date of completion, and because, from 1 March 2019, purchasers have only 14-days from completion to submit their return, (this deadline had previously been 30-days), estimates for the latest month are based on incomplete data, and are adjusted upward to compensate. This adjustment is based upon the difference between initial and final estimates in previous months. A similar but smaller adjustment is also made to the penultimate month.
HMRC has also published its monthly tax receipt statistics, which show that capital gains tax (CGT) receipts hit a record £9.2bn in the 2018/19 financial year, up from £7.8bn in the previous 12 months. Whilst there may be a number of reasons for this, such as investors cashing in on stock market increases, it’s possible that an increase in second property disposals is playing a part. The CGT rate on second property disposals is 18% for gains within any available basic rate tax band, and 28% for gains in the higher rate band or above. The gradual phasing out of mortgage interest relief at the higher and additional rates of tax has been making letting out properties less profitable for many buy-to-let investors and may be leading to an increase in disposals of second properties.
Conversely, SDLT receipts for April 2018 to March 2019 are 5.3% lower than in the same period last year. Receipts in 2016/17 increased by 10.4 per cent due to the introduction of higher duty rates on additional dwellings in April 2016 and this upward trend largely continued through 2017/18. HMRC’s explanation for the 2018/19 dip is that this is in part due to the devolution of SDLT payments in Wales and the introduction of First Time Buyers’ relief which started in November 2017. It will be interesting to see if this downturn continues.