Property sales dip despite expected hike in interest rates
Potential buyers are continuing to take a ‘wait-and-see-approach’ to property transactions, despite threats of an impending interest rate hike, according to an independent estate agent.
Haart reports that transactions in September fell by 1.5% in London and by 0.6% across England and Wales.
In addition, there was a decrease in the number of first-time buyers entering the market, with a drop of 0.6% on the month and 10.6% on the year across England and Wales. However, while the number of sales dipped, viewings increased, highlighting that buyers are choosing to look at more properties before they buy.
With the Bank of England mooting the prospect of an interest rate rise as early as next month, this could be about to change as buyers attempt to get onto the property ladder before mortgage interest rates rise for the first time in ten years.
Commenting on the latest figures, Paul Smith, CEO of Haart said: “After strong hints from the Bank of England that we could expect an interest rate hike as early as November, the savvy buyer will take this opportunity to act now and lock themselves into great fixed rate deal whilst they can. I expect we will see a surge in autumn transactions as many rush to buy before a rate rise kicks in.”
While many in the industry are blaming factors such as Brexit for buyer hesitancy, Mr Smith believes that: “If anything is holding buyers back it is tax.”
Commenting on the difficulties of affording a first time home, he called stamp duty: “One of the nation’s most despised taxes because it is so unfair, and because families and first-time buyers struggle to afford it on top of everything else.” The average purchase price for first-time buyers has risen by almost 10% on the month, and 0.1% on the year.
Mr Smith went on to say that: “Buyers are being hit in every direction at the moment and the least the Government can do is offer to end stamp duty for first-time buyers in the Autumn Budget. It would give them that all important helping hand onto their first step of the ladder.”
House prices across England and Wales dropped last month, but overall remain up 0.5% on the year. The figures also reveal that the number of properties coming onto the market fell by 2.2% last month, and are down 14% on the year.