Residential property sales have fallen considerably in the UK, with official data showing a fall of 8.5% month on month between June and July and a year on year decline of 12.4%.
The data from HMRC shows that overall there were 86,630 residential sales and 9,760 non-residential sales in July 2019. Non-residential sales also fell, down by 2.8% on a monthly basis and 5.8% lower than July 2018.
The figures suggest that there are a number of barriers preventing people from buying and Kevin Roberts, director of the Legal & General Mortgage Club, believes that it is not just Brexit.
‘While Government schemes have helped thousands of first time buyers onto the property ladder, we need to think about those further up the ladder too. To stimulate the market, the Government needs to build more housing across all types of tenure. This will provide second steppers and last time buyers with more choice and in turn, families can up or downsize accordingly,’ he said.
But it could be the usual summer slump exaggerated by Brexit uncertainty, according to Marc von Grundherr, director of Benham and Reeves. He also thinks sellers are reluctant to accept lower prices.
‘Although mortgage affordability remains fairly good, the huge stamp duty costs facing many buyers will do little to stimulate demand at the other end and continue to act as a financial anchor for those looking to climb the ladder,’ he explained.
But Joseph Daniels, founder of modular developer Project Etopia, does put the blame on Brexit. ‘Brexit has cemented caution into the attitudes of buyers and sellers and the sales slump is all but nailed on now until the political uncertainty settles down,’ he said.
Neil Knight, business development director of Spicerhaart Part Exchange and Assisted Move, believes it is more complicated than that. He pointed out that the figures follow the recent construction output figures which showed that overall construction output dropped by 1.3%, and the UK Finance mortgage trends report which showed levels of remortgaging, home mover mortgages and first time buyers all fell in June.
‘It feels like a fairly gloomy picture for the housing market. However, when you take into account that the drop in construction output was mainly driven by a 6% decline in private housing repair and not new housing and that while nationally, mortgage transitions are down, actually, when you look at a regional picture, it is only London where the market is struggling, it paints quite a different picture,’ he said.
He also pointed that the latest figures from the National House Building Council show that builders and developers registered the highest number of new homes for 12 years during the last three months.
‘These figures tie in much more with what we are seeing. While overall, the housing market may be subdued, the new homes market is much more buoyant. At Spicerhaart Part Exchange and Assisted Move, we are busier than ever, working with developers across the UK to offering part-exchange and assisted move services. We are being led to believe that the house building industry as almost ground to a halt, but that is simply not true,’ he added.
‘The demand is there and the activity is too and it is great to see such confidence in new-build housing despite uncertain economic and political times. Let’s hope it filters through to the rest of the market,’ he concluded.
Source: Property Wire