The property market has experienced a post-referendum “stutter”, as sales drop to the lowest level for three years, according to the latest figures from HMRC.
The provisional seasonally adjusted UK property transaction count for July was 94,550 residential and 9,820 non-residential sales, down by 0.9% over the month.
On an annual basis, July’s seasonally adjusted figure is 8.3% lower than in the same month last year.
However, London chartered accountant Blick Rothenberg also points out that VAT receipts are up by 5% over the year, which generally means more spending on the high street and may reflect a sharp rise in property transactions up to the end of March. Ahead of the introduction of the Stamp Duty surcharge for additional properties on 1st April, many buy-to-let landlords rushed to purchase rental properties.
Commenting on the figures, Blick Rothenberg’s Frank Nash says: “This was to be expected following the acceleration of transactions into the first quarter of 2016 to beat the 3% buy-to-let or second home Stamp Duty surcharge. However, residential property transactions over the three months to July 2016 have shown the lowest numbers over the last three years.
“Property sales have fallen by 56,300 in the four months to July 2016 compared with the four months to July 2015, and are actually down 52,340 on the sales in the same four months in 2014. For the month of July, property transactions were the lowest in three years, but mid-summer is traditionally quiet.”
The Managing Director of estate agent Stirling Ackroyd, Andrew Bridges, also responds to the data: “There’s been a slight stutter in the property market’s post-referendum recovery, but it’s no cause for alarm. It’s the usual suspects making moving onto and up the ladder a challenge. Stamp Duty is certainly a barrier, alongside the difficulty of deposit saving for many, and the latest Help to Buy ISA news will do little to inspire hope for London’s first time buyers.
“In London, these problems will sharpen over the next couple of months, as lower interest rates encourage buyers to grab a property with a cheaper mortgage, putting those with small deposits at a disadvantage. The only solution to the crisis is to build our way out of the rapid house price inflation we have seen in recent years, and ensure there are enough high quality homes on the market.
“More new homes are being approved in London, but not nearly enough to provide enough homes to soothe demand. Newham rejected 92% of possible new home approvals last quarter, and this approach is unsustainable. People can only move if there are homes to move into and right now London is failing to provide.”
Will this property market stutter continue?
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