New housing market data shows ‘start of the long-awaited slowdown’
MARC DA SILVA
UK residential transactions totalled 96,290 in June, down 55.1% when compared with last year and 3.1% lower than the previous month, according to the latest HMRC Property Transaction data.
HMRC also reported that the number of non-residential transactions was 8,850 in June 2022, around 24.3% lower than the previous year and 9.5% lower than the previous month.
The sharp drop in transactions year-on-year is unsurprising given the impact of the stamp duty holiday on the volume of property deals.
“The drop-off compared to May is a more accurate gauge of where the market is headed, as soaring inflation and rising interest rates suck confidence out of the market,” said Ross Boyd, founder of mortgage comparison platform Dashly.com.
The data from HMRC reveals that residential property transactions in June were down 7.9% on the prior month.
Jason Tebb, CEO of OnTheMarket, commented: “Transaction levels were slightly lower in June compared with May, however while the frenetic pace of the housing market may have slowed, the market continues to show remarkable resilience.
“As evidence emerges of more stock becoming available, we’re seeing the beginning of an inevitable rebalancing of supply and demand, yet this will take time.”
Charlotte Nixon, mortgage spokesperson at Quilter, firmly believes that “the wind had finally been knocked out of the sails of the housing market”.
She continued: “In comparison to pre-pandemic levels, June 2022 saw transactions dip below 100,000 for the first time since June 2013 – excluding the 2020 anomaly – suggesting the HMRC said the figures needed to be treated with caution as transactions in June 2021 were significantly impacted by forestalling caused by temporarily increased nil rate bands of stamp duty (SDLT) and land transaction tax (LTT).”
“UK monthly property transactions have slowed dramatically in comparison to the rapid pace witnessed in June last year when the first stage of the stamp duty holiday was withdrawn, and they now sit even lower than pre-pandemic levels. With the cost-of-living crisis now weighing heavily on people’s finances, we may be witnessing the start of the long-awaited slowdown.”
Jeremy Leaf, north London estate agent, commented: “Although inevitably reflecting activity of several months previously, these figures are always a better indicator of housing market strength than more volatile house prices.
“The latest numbers are no exception and show how the cost-of-living crisis and rising interest rates in particular have contributed to an increase in the length and reduction in the number of transactions.
“Nevertheless, at the sharp end we continue to see a steely determination to move, particularly from those keen to take advantage of attractive mortgage offers which are imminently expiring.”