The End of the Holiday
City Centre Supply
The end of the SDLT holiday has led to a rush of completions in March but it will probably lead to lower activity in coming months. Meanwhile, new EPC data allows us to update our new supply by population density analysis.
The End of the Holiday
Yet another Stamp Duty Land Tax (SDLT) holiday has ended with a spike in transactions as buyers rushed to beat the deadline. HMRC estimated there were nearly 150,000 residential transactions in England in March, double the number recorded in March last year. The Bank of England reported gross secured lending was 95% higher than the same month last year and the net change in lending was £13bn – around £10bn higher than recent months.
One of the challenges with SDLT holidays is trying to figure out what the underlying state of the market is. There will inevitably be a slowdown in the months following March, as sales were brought forward to save money. However, looking ahead, it is probably worth keeping an eye on Scotland – where sales tend to be around 10% of England’s number and there was no holiday – and other leading indicators. For example, the latest Bank of England data on mortgage approvals for house purchase show they were 3% lower than the pre-pandemic average in March while, looking further ahead, Zoopla reported “buyer demand” was 1% higher than last year and Rightmove reported “The level of agreed sales falling through remains steady” last month.
City Centre Supply
We highlighted the fall in number of new flats being delivered in last week’s Chart of the Week but a recently published field in the Energy Performance Certificate (EPC) open data finally allows us to update our analysis of new build supply by local population density. Our original analysis in 2020 used LSOAs across England split into population density deciles based on 2011 Census data. We found “a big increase in housing delivery in less dense locations since 2013 while city centre delivery has stagnated since 2016”. We had hoped to update our analysis more regularly but an issue with the EPC open data means it has undercounted new supply relative to the published MHCLG tables since then. However, back in March, MHCLG added to a new field to the open data which allows us to identify the roughly 7% of records where the home was new but not identified as such in the data.
The updated analysis shows a continuation of the trend while also highlighting the impact of rising interest rates in recent years. To simplify the chart, we have split it into population density quintiles. As before, it is the previously least dense locations that have seen the biggest increase in supply since 2013 – not a surprise given the policy focus on volume housebuilders and this group of LSOAs covers the largest land area. However, the decline in output since 2022 is clear. Meanwhile, new supply in more dense areas has continued to stagnate since the tax changes in 2016 but the impact of higher rates on more dense locations has been subdued until recently. Our latest data, that will be revised) suggests a big fall in completions in city centres across England.
Market A Glance
Economy – UK
The ONS estimated monthly GDP increased 1.4% in the year to February 2025. Monthly GDP was 3.9% above the pre-pandemic peak recorded in January 2020. However, this monthly data will continue to be revised in the future.
House Prices - UK
Rightmove reported a 1.3% annual rise in asking house prices in April 2025 while Nationwide reported a 3.4% annual rise in their mortgage approval-based index over the same period. Meanwhile, the ONS reported a 5.4% annual rise in its sales agreed index for the year to February 2025.
Transactions – UK
HMRC provisionally reported 177,370 residential transactions in March. This was 79% above the pre-pandemic (2013-2019) average. Meanwhile, the Bank of England reported mortgage approvals for house purchase in March 2025 were 2% lower than the pre-pandemic average.