The latest data and analysis released by HMRC has revealed that the volume of residential property transactions valued at £40k and over fell by 9.6% between May and June this year.
According to the figures, the provisional seasonally adjusted UK property transaction count for June 2019 was 84,490 residential and 9,140 non-residential transactions. Although fluctuating, residential transactions have been relatively stable over the previous 10-years.
Marc von Grundherr, Director of Benham and Reeves said, “Scary reading on the face of it, but it’s important to note that this data is reported with a bit of a lag and so the level of transactions being relayed are really those accepted back in March.
“With many of us, perhaps foolishly, believing we would be exiting the EU at the end of March, it stands to reason that the vast majority of buyers may have refrained from a sale until this event had passed.
“Therefore any dip in transactions should be viewed as a momentary stutter and with many other market indicators suggesting a return to form and growing levels of buyer demand over the last few months, we should start to see the number of properties being sold climb from here on in.”
Shepherd Ncube, Founder and CEO of Springbok Properties said, “A lull in transactions will come as a cause for concern in what is currently a rather fragile market landscape, however, the broader picture simply doesn’t suggest a market that is on its knees.
“Homebuyer appetite is alive and well and while many may not want to fill up on bread until the main course of Brexit is finally served, we are on course to see a healthy level of properties transact this year regardless.
“We can only hope that a new prime minister doesn’t rock the boat and in fact, he could help to steady it to a degree. But while suggestions of housing first initiatives such as a transferral of stamp duty tax to the seller may help boost buyer demand, we must be sure not to restrict the flow of housing stock reaching the market by deterring sellers financially.”
Tomer Aboody, director of property lender MT Finance said, “The fall off in transactions compared with this time last year is astonishing. Some transactions are happening but the volumes are not there as people can’t afford to move. Affordability is an issue, coupled with uncertainty around Brexit, which is having a significant impact on people’s lives and decisions about whether to move or not.
“The government needs to do a lot more to stimulate the housing market. There is a knock-on effect – if people are moving, whether at the top or the bottom of the market, it helps everyone else. Hopefully, the announcement of a new prime minister who has declared that he wants to reform stamp duty will have the desired effect of helping get transactions back to steady growth, which is good for everyone.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman said, “Once again it is transactions which are a much more important test of property market strength than prices, as the latter can fluctuate wildly. Although these are only one month’s figures, they show a significant decrease in transactions compared with this time last year after a long run of Brexit-defining performance.
“Looking forward, uncertainty is playing a big part and from confirmation of the new prime minister to hopefully conclusion of the EU negotiations by the end of October by the latest, some of that inevitable pent-up demand will be released. Signs of improving demand in particular over the last few months have been very encouraging, and we would like to see more of this.”
Craig Hall, Head of Broker Relationships and Propositions, Legal & General Mortgage Club said, “While support from the mortgage market and government schemes has helped many borrowers buy their first home, the current undersupply of housing is slowing growth in transaction volumes.
“Despite Legal & General Mortgage Club research showing that just 12% of consumers, looking to buy in the next six months, have considered delaying their decision because of current political uncertainty, a lack of suitable housing at all tenures and high stamp duty costs is leading many to stay put.
“One solution would be to extend the current Stamp Duty exemption to last-time buyers, aiding them to easily downsize to a more suitable home, freeing up larger homes to growing families looking to move up the ladder.
“Anyone unsure about what their next move is, should get in touch with an independent mortgage adviser who can help secure the best mortgage for the individual needs of the borrower.”
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