Here’s what happened in Scotland.
Land and Building Transaction Tax is Scotland’s version of stamp duty, applied to resi and commercial property. As with stamp duty, the Scottish Government created an LBTT holiday in July 2020 in response to concern over how Coronavirus would hit the housing market.
But unlike the Westminster government, in Scotland, the holiday came to an end on March 31 this year. From April 1 in Scotland, transaction volumes and prices immediately took a hit - and, on the surface, quite a big one.
The Office for National Statistics house price index showed average prices dropping in April after rising for 11 months in a row. The month-on-month fall was quite dramatic - down 4.1 per cent - although the annual growth rate was still 6.3 per cent. More important for agents, completed transactions fell by 35 per cent.
However, hold on - this is not a bad news story.
That’s because although hard data since April is limited (it’s just a few months since the LBTT holiday ended) it appears from agent comments that demand and prices have both risen slightly, and absolutely no one is mentioning a crash.
In May, house prices actually rose again - 1.9 per cent in just one month according to the Walker Fraser Steele index, which is arguably the best-regarded housing market measure in Scotland. As a result, the industry is now optimistic.
Morton Simpson, of Thorntons agency in Dundee, says: “Since the tax has come back it hasn’t made any difference. We’ve not seen any kind of drop whatsoever, even at the high end.”
And David Cruickshank of D M Hall adds: “The market continues to be characterised by abnormally high demand and a limited supply of property. This has resulted in sales occurring readily, with competition for many properties, resulting in increasing house prices.”
This isn’t to say there are no challenges or concerns - as with England, where there is worry about how the eventual end of furlough and other support mechanisms will hit unemployment and confidence.
And the lower end of the housing market and demand from first-time buyers have both eased while the middle and higher end of the market remain strong - almost above the levels before the pandemic.
However, these concerns are not sufficient to dampen agent optimism.
John Boyle of Rettie & Co adds: “We have continued to see enquiry and demand well above pre-pandemic levels, while supply in many of the core markets lags. This is having the effect of increasing competition and, in turn, prices.” The agency expects house price growth to be around 8.0 per cent by Christmas.
There are no guarantees, of course: England’s market has other dynamics but the underlying supply-demand gap is, if anything, stronger south of the border than in the north.
That at least should see an orderly and only modest slow down in the English housing market after September 30’s conclusion to the stamp duty holiday.
Let’s hope so…because later in the year there will be government announcements on taxation which may alter confidence a lot.
*Editor of Estate Agent Today, Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn