Annual Transactions To June Shrink By 16.5%
Property transactions have fallen considerably on both a monthly and annual basis.
According to June data, provided by HM Revenue and Customs (HMRC), the 84,490 residential transactions recorded in June represented a 9.6% monthly decline when compared with May’s figures and a 16.5% reduction in transactions when compared with June 2018.
Unsurprisingly, this trend has permeated through to non-residential transactions in June. The 9,140 non-residential transactions equated to a monthly fall of 7.2% and annual decline of 12.4%.
Year-on-year non-seasonally adjusted residential transactions for June uncovered a more significant decline with June 2019 transaction figures 25.1% lower than June 2018.
Completed applications by HM Land Registry (HMLR) were also 2.6% down on June 2018. HMLR completed 1,662,826 applications last month; in comparison, 1,701,272 applications were completed in June 2018.
Completed applications for June 2019 were also 4% down on May’s 1,732,280.
Mike Scott, Chief Property Analyst at Yopa, commented:
“These figures are hard to reconcile with data from UK Finance showing little change in the number of mortgages completed in May, when compared with May 2018.
“Taken together, the data suggests that the number of mass-market purchases of homes with mortgages hasn’t changed much, and therefore there has been a very sharp decrease in the number of homes bought for cash, which tend to involve buyers who are not in chains and have no pressing need to move, letting them delay their purchase.
“The most likely explanation is that the uncertainty of the impending Brexit deadline caused home buyers, especially cash buyers, to hold back from agreeing purchases in the first three weeks of March, before an extension was agreed, and that these delayed sales would otherwise have gone on to complete in May or June.
“We therefore expect that the year-on-year comparison will start to improve in the July figures, and will be fully recovered by the autumn, at least until we start to see the effects of the new October deadline around the end of the year.”
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.”
Is this scary reading for the property market? Or, does the broader picture suggest a more resilient market?