The latest quarterly figures from HM Revenue and Customs saw a fall in transactions compared to rises in the previous two quarters. It is the lowest level since the second quarter of 2020.
It added that residential property transactions in the quarter were around 31 per cent down on the previous quarter and 14 per cent down on the same period last year.
Non-residential property transactions were 12 per cent less than the prior quarter and three per cent lower than Q1 2022.
Residential transactions account for majority of transactions
The report said that around 89 per cent all stamp duty transactions were for residential properties, which is around two per cent down on the prior quarter and one per cent less than the same period last year.
Liable residential transactions fell by a third between Q4 2022 and Q1 2023 to 111,900, whereas non-liable transactions grew by 27 per cent to 98,000 in the same period. This trend was attributed to the increase in nil rate thresholds and upped first-time buyers’ relief.
Within residential transactions, just over half were eligible for stamp duty, down from 70 per cent in the same period last year.
Around a quarter of liable residential transactions were valued at under £250,000, with liable transactions in this band falling by over half to 29,200 between Q1 2022 and Q1 2023.
The report added that between Q1 2022 and Q1 2023, liable residential transactions valued from £250,000 to £500,000 have decreased by 28 per cent to 52,100.
Higher stamp duty rate transactions show fall
Higher rates of stamp duty, for additional properties like buy-to-let properties and second homes, fell by around 22 per cent in Q1 2023 compared to the same period last year.
It added that when compared to Q4 2022, there has been a fall of around a quarter in these transactions.
The report noted that between 2018 and 2020 these higher stamp duty transactions made up around a third of liable transactions, ad rose to 60 per cent during 2020 when the stamp duty holiday was introduced. However, now they are returning to pre-pandemic levels.
Stamp duty receipts down nearly a quarter
On the receipts side, total stamp duty receipts were around 34 per cent down compared to the previous quarter and were nearly a quarter down on the same period last year, coming to around £3.5bn.
The report noted that the downturn reflects the fall in total stamp duty transactions, whereas in the previous quarter the fall in receipts was due to increased transactions due to the rise in the nil rate threshold and upped first-time buyers’ relief coming into force in September.
HMRC said that residential property receipts were around £1.9bn in Q1 2023, which is 36 per cent lower than in the previous quarter, and 23 per cent down on Q1 2022.
It added that non-residential property receipts in Q1 2023 were 27 per cent less than in the previous quarter at £875m, which is 21 per cent lower than Q1 2022.
Higher stamp duty receipts came to £891m, which is 34 per cent down on the prior quarter and a decrease of 19 per cent on the same period last year.
