House sales rise following introduction of stamp duty holiday supporting nearly 750,000 jobs
Residential property transactions rose 15.6% in August following introduction of stamp duty holiday.
- rise in sales supports nearly three quarters of a million jobs in the sector – with new homeowners also spending extra cash on decorating, furniture and appliances
- construction sector reports 30% boost in output in July
House sales rose 15.6% in August following the introduction of the stamp duty holiday – helping to protect nearly three quarters of a million jobs in the housing sector and wider supply chain, new figures revealed today.
After a 14.5% rise in July, residential property transactions in August rose a further 15.6% as more people decided to buy a new home or move house. The increase in transactions came after the Chancellor announced a stamp duty holiday at the start of July that will last until March next year.
The move has helped to protect nearly 750,000 jobs, benefitting businesses across the housing supply chain and beyond, with the Bank of England estimating that households who move home are much more likely to purchase a range of durable goods, such as furniture, carpets or major appliances.
It is expected that among others housebuilders, estate agents, tradespeople, DIY stores, removal and cleaning firms could all benefit from the increased activity.
Chancellor Rishi Sunak said:
Every home sold means more jobs protected – helping us to deliver on our Plan for Jobs.
But this isn’t just about the housing market. Owners doing up their homes to sell and buyers reinvesting stamp duty savings to make their new house feel like a home are also firing up local businesses, supporting, creating and protecting jobs across the country.
As part of its Plan for Jobs, the government introduced a temporary stamp duty holiday for residential properties worth up to £500,000 effective from 8 July 2020 until 31 March 2021.
The holiday means nine out of ten people getting on or moving up the property ladder will pay no Stamp Duty Land Tax (SDLT) at all. This measure delivers an average saving of £4,500 in SDLT.
The government wants people to feel confident to move, to buy, to sell, to renovate, and to improve their homes, driving growth and supporting jobs.
Figures from Building Societies Association show that there has been a marked uplift in the number of people who say that now is a good time to buy a property - 37% in September compared to 25% in June, whilst figures from Checkatrade show that:
- more than one in ten (11%) of Brits are hoping to have bought a new home by the end of March 2021
- 33% of those hoping to move plan to spend the ‘extra’ cash on home improvements and renovations.
Mike Fairman, CEO at Checkatrade, said:
Since the Government’s stamp duty changes came into effect earlier this year, we’ve seen record numbers of home improvement enquiries to the site suggesting that consumers are planning to reinvest their stamp duty savings straight back into their homes.
This increase has not only benefitted Checkatrade as a business, but also the livelihoods of the traders we represent.
Private housing output grew by about 30% in July compared to June, the single largest contributor to the monthly growth in construction output that month.
Notes
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As part of its Plan for Jobs, the government has temporarily increased the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This applies from 8 July 2020 until 31 March 2021 and cuts the tax due for everyone who would have paid SDLT. Nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.
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87% of Primary Residence transactions in England and NI will no longer pay any SDLT, 93% outside of London and SE.
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The Home Builders Federation (PDF, 2.2MB) estimate that 240,000 people are directly employed by housebuilders and their contractors and the sector supports a further 300,000-500,000 people indirectly employed.
Please see below for figures from:
- Bank of England (PDF, 293KB)
- Building Societies Association
- National Statistics: monthly property transaction statistics
- Checkatrade (contact directly)
- In 2019, expenditure on home-move related items was around 5% of total consumption (ONS National Accounts data).
- SDLT is devolved in Scotland and Wales. The Scottish and Welsh governments benefited from this SDLT cut through an increase in their block grants, enabling them to provide a similar tax cut.