Rate of house sales falls year on year

The number of completed house sales sold this year is 3.4% lower than at the same point last year according to new figures for England and Wales released by LSL Property Services.

The number of house sales in November fell 15% compared to October. However house prices have reached record levels with a further 0.6% growth on October. While slower than October’s 0.9% growth it leaves house prices 6% higher than they were a year ago.

LSL also warn of a possible late winter surge caused by second home and buy-to-let transactions.

Richard Sexton, Director of e.surv chartered surveyors said: “Home sales have fallen 15% in November compared to October. In direction, a decline of some sort does follow the trend seen last November.

“But total sales for the 11 months of 2015 so far are still 3.4% lower than the same months in 2014. The housing market will need a Christmas boost to sales to beat last year’s figures. And the Chancellor’s changes could be the gift required.

“House prices soared in the five months following Nigel Lawson’s withdrawal of the multiple mortgage tax relief in 1988. More recently in Scotland, after the Land and Buildings Transaction Tax was announced there was also a surge in the sales of high end properties to beat the deadline.

“England and Wales may now feel the same forces, as there will be a growth in demand from both first-time buyers with extra financial support and buy-to-let landlords hoping to invest before the tax changes come into force.

“While the Chancellor has planned to increase the number of houses being built, none of these will be completed in the next few months. As the number of houses on the market is at a historically low level, those rushing for the April deadline will be fighting for a decreasing number of properties. So we could see a spike in both house prices and sales over the normally frosty winter period.

“For example, this potential surge in demand could be most obvious in Salcombe, Devon. The town has the highest percentage of second homes in England. In Salcombe, the average price paid for a home in the last year was £532,000.

“A second home buyer here would need to find an extra £15,960. With such a significant hurdle after the tax comes into force, anyone who wants to buy a home in the area will be rushing to buy before April 2016.”

Peter Williams, Chairman of research firm Acadata said: “We estimate that the number of housing transactions in England & Wales for the month of November 2015, as recorded by the Land Registry, will total some 75,000.

“Although this is a decrease of 15% from October, over the last three months sales volumes have been following a very similar pattern to that of 2014. The fall in sales volumes in November is therefore more of a seasonal factor than any underlying shift in housing demand.

“There have now been four months in 2015 when the number of transactions have exceeded the levels recorded in 2014, albeit marginally, all of which have taken place in the second half of the year.

“Despite this uptick in transactions in the second half of the year, total sales volumes in 2015 for the eleven months to November are still down by 3.4% compared to the same period in 2014, largely due to the slow start to the year.”

Today's Conveyancer