Compared to August, the number of homes that changed hands rose by 67.5 per cent in September to 160,950.
This created the third spike in property transactions for the year, after June and March.
Year-on-year HMRC’s property transaction data showed that September’s activity, which netted the government £1.3bn in taxes, was 68 per cent up on the same period last year.
The stamp duty holiday offered buyers the chance to pay no stamp duty on the first £500,000 of their property purchase between July 2020 and 30 June 2021 which meant a saving of up to £15,000.
When the incentive was revealed, Chancellor Rishi Sunak said it would end in March causing the first spike in property transactions. The deadline was extended until the end of June driving transactions up to 198,240, their highest point since records began. A reduced tax incentive was left in place until the end of September offering buyers the opportunity to save up to £2,500 in stamp duty.
Overall, the stamp duty holiday has generated £13.5bn in revenue for the tax man between July 2020 and the end of September 2021, according to analysis by Coventry Building Society.
Karen Noye, mortgage expert at Quilter, said: “Considering the saving available to home buyers was a maximum of £2,500, it is somewhat surprising that so many rushed to buy while house prices remain so inflated.”
The Land Registry’s latest house price data showed that prices rose 9.8 per cent annually in August increasing the average property value to £280,921.
Noye added: “As Covid-19 cases are beginning to rise and the prospect of restrictions being reinstated increases, the number of people willing to move home may well start to drop as we head into winter. With the stamp duty holiday now officially drawn to a close time will tell whether the property market will return to some semblance of normal.”
Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “The fact we saw a surge at all shows the psychological power of the tax break. For those who had been locked in an incredibly frustrating housing market for months and may have initially been aiming for one of the earlier deadlines, this was a final chance to at least get a small saving on the painful and expensive process of buying a house.
“We expect to see sales slow from this point, reflecting the fact that agents reported a drop in buyer interest in August and a levelling off in September. We’ve also seen six successive months of drops in the number of properties coming to the market, so even if there were plenty of keen buyers, the property drought would keep a lid on sales.
“However, we’re not expecting the market to come to a shuddering halt, because people are still reassessing how and where they want to live, and while mortgages are gradually becoming more expensive, they’re still at low enough levels to support activity in the market.”
