The housing market is making a contribution towards the Government's deficit reduction plan as stamp duty receipts surged in late 2013.
Statistics from HMRC show that the number of residential property transactions reached 111,080 in November – the highest level in six years.
The strong transaction levels reflect other areas of the market, such as valuations, which experienced record levels of activity in November as awareness of the Government’s Help to Buy scheme begin to spread.
Despite a slight fall of 3% in the number of housing transactions in December, to 107,620, this still represented an increase of 35% on the same month in 2012.
Provisional figures for the final months of 2013 show stamp duty receipts soaring to £960 million in December. This represents a rise of 23% on the previous month and 62% on December 2012.
Stamp duty income for the final quarter, which reflects the launch of the second phase of Help to Buy in October, rose to around £2.6 billion – 3.5% stronger than the previous quarter and 42% higher year-on-year.
Rising Prices Drag Thousands into Higher Band
The strong performance of the housing market, boosted by schemes including Funding for Lending and Help to Buy, has seen average house prices approaching £250,000.
The latest House Price Index from the Office of National Statistics showed that average prices had reached £248,000 after rising by 5.4% in the year to November.
This is significant for homebuyers as a purchase price of £250,000 sees the rate of stamp duty increase from 1% to 3%.
Schemes targeting first-time buyers have also dragged thousands of new buyers over the first stamp duty threshold of 1%, which applies when the purchase price exceeds £125,000.
The ONS reported that the buying price of property types sought by first-time buyers rose by 6.4% in the year to November.
|
Purchase Price |
Stamp Duty Percentage |
|
£0 - £125,000 |
0% |
|
£125,000 - £250,000 |
1% |
|
£250,000 - £500,000 |
3% |
|
£500,000 - £1,000,000 |
4% |
|
£1,000,000 - £2,000,000 |
5% |
|
£2,000,000+ |
7% |
|
£2,000,000+ [Bought by corporation] |
15% |
Find out more about stamp duty charges here.
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