Why have transaction levels not spiked as expected?
HMRC’s transaction figures for July showed that the number of seasonally-adjusted property transactions fell by 4.4% between June 2015 and July 2015, and increased by 0.2% between July 2014 and July 2015.
Doug Crawford, CEO of myhomemove, the UK’s largest provider of conveyancing services, comments:
“The general election’s outcome assured buyers and sellers that the housing market was likely to remain stable, leading to a spike in the number of property transactions in June.
“Today’s HMRC figures show that the number of transactions has barely changed over the last year, rising just 0.2% compared to last July. This begs the question about why a year’s steady improvement in the economy hasn’t led to an increase in home purchases, particularly when mortgage availability and rates have been so favourable.
“The main impediment has been a serious shortage in supply – there is a lot of appetite from buyers but not enough homes for sale to meet demand. This mismatch is stoking price rises. In some areas we have even seen instances of gazumping, as sellers look to make the most of competition between buyers by accepting higher offers.
“The big question looming in the background is the timing of an interest rate rise from the Bank of England. Many would-be buyers are keen to purchase while mortgage rates are so low. Increased anticipation of rate rises is putting greater pressure on buyers and competition for homes for sale could drive up prices further in the short term.”