The property market is flatlining with the number of home sales holding steady from month to month, official figures revealed today.
Just under 100,000 property transactions took place across the UK in July, according to HMRC and the Land Registry – a fall of 0.8 per cent on June and a fall of 3.2 per cent on July 2017.
Home sales – adjusted so that seasonal variations such as sharp drop-offs through the Christmas season – have remained fairly consistently around the 100,000 for the last 18 months (see graphs below).
Home sales across the UK are holding steady despite less than ideal conditions.
One expert suggested that this showed how resilient the UK property market is, considering the challenges posed by stretched household budgets and uncertainty over Brexit – but also that a dormant market in the South east was being counter-balanced by higher activity in other regions.
Brian Murphy of Mortgage Advice Bureau said the data showed ‘clearly a consistent level of activity’.
‘That all said, the topline number of transactions doesn’t provide a regional breakdown, therefore doesn’t highlight the regional variations of market activity which are still prevalent, with some areas such as the North and Midlands buoyant when compared to the cooling environment of London and the South East,’ he added.
Steady: On a seasonally adjusted basis, property transactions have held up well over the last 18 months, despite financial and political uncertainties.
‘What today’s numbers do tell us, however, is that broadly speaking, the market remains steady despite the current economic and political headwinds, and certainly would suggest that the UK housing market remains resilient, with many consumers continuing with their personal plans in terms of moving home, regardless of what’s happening in the headlines.’
The disparity between the South East and other regions of the UK was laid bare by figures from property website Rightmove yesterday, showing that asking prices dropped 2.3 per cent over the past month.
The peaks and troughs in property transactions correspond to highs and lows for the housing market – but also to changes in stamp duty, as occurred in December 2009, April 2012 and April 2016.
Falls in London far exceeded those elsewhere at 3.1 per cent.
The average listed home fell £7,218 between July and August to £301,973, dragged down by sharp declines in London, according to Rightmove.
The property portal, which has 90 per cent of all estate agent listings on its website, played down the price fall saying it was ‘seasonal’, although it was steeper than the 0.9 per cent fall recorded this time last year.
The Rightmove data yesterday showed the regional disparities in house price movements.
Former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf said that transaction numbers are more relevant when assessing the health of the housing market than property prices, ‘which tend to be more volatile and influenced by stock shortages’.
‘July’s HMRC data is more encouraging than the previous month’s in that the transaction levels are not declining by as much as they were,’ he added. ‘This reflects what we are seeing on the ground – a broadly flat market with one month up, one month down, and no clear pattern.
Rightmove data showed how asking prices have changed in each month of the last year.
‘Certainly we are not seeing any significant change or expecting any as the market adjusts itself to the slightly higher interest rate climate.’
The non-adjusted HMRC data showed a 6.5 per drop from June to July, which is expected as households begin their summer holidays.
Mike Scott, chief property analyst at Yopa, does not ‘expect any significant change in activity levels compared with last year as we move into the busier autumn housing market’.
‘We should end up with a total of just under 1.2 million house sales in 2018, the slowest year since 2013,’ he added.
‘However, this is still a much more active market than in the years after the 2008 credit crunch when we had a five-year period with fewer than a million house sales per year.’