The current stamp duty relaxation has so far triggered a 7% rise in house prices from June 2020 to February 2021, according to new analysis by Search Acumen.

This rise has added £17,265 to the price of the average home in England, and more than offset the £2,572 Stamp Duty Land Tax (SDLT) savings made on the average property.

The property data and insight provider suggested the stamp duty holiday has helped deliver a property market stimulus that has “far outweighed” the immediate response to the 2007/08 financial crisis.

An average 103,724 residential property transactions have occurred each month across England and Northern Ireland since the tax break was introduced in July last year, which is up 22% from the 84,691 average in the 12 months to March 2020, before the first lockdown stalled the market.

Since the measure was introduced, Search Acumen estimated that 171,303 extra deals have taken place compared to the pre-COVID period in 2019/20.

“This analysis suggests the property market has been far more responsive to intervention compared to the post-financial crisis holiday,” commented Search Acumen director, Andy Sommerville.

“The housing market’s strong performance compared to the wider economy highlights the contrast between the current healthcare crisis and its economic impacts, and the 2008/09 crisis which was rooted in financial markets.”

Search Acumen’s analysis revealed that the SDLT holiday of 2008/09 in the wake of the financial crisis saw an average of 60,048 transactions per month. This was down 27% from the previous 12-month average of 82,378 monthly residential property transactions.

Higher transaction volumes during the current holiday could be partly attributed to lending conditions being more favourable than in the aftermath of the financial crisis. Search Acumen highlighted that strong credit availability has helped property transactions progress despite pandemic-induced disruption to the economy, with the tightening of credit mainly concentrated in the high LTV segment of the mortgage market.

Sommerville added: “As a result, financing for house purchases has been in reasonably good supply and worked in tandem with the SDLT holiday to generate a level of activity not seen for a decade, despite the unprecedented challenges of COVID-19.

“In the long-term, the industry needs to put conveyancing capacity – not to mention mental wellbeing – at the top of the agenda given the pressure law firms have been under to ensure clients complete on time.

“It is clear the traditional way of performing due diligence on transactions is getting in the way of efficiency, and we need to pivot quickly to digital, data-led solutions that can improve the experience for homebuyers and their advisers.”

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