Financial Reporter: Property transactions take a dip in July
Tue 20 Aug 2013
Figures from HMRC released today show that residential property transactions decreased slightly in July to 88,960, despite a trend since the beginning of the year of a slight monthly increase.The provisional seasonally adjusted UK property transaction count for July 2013 was 88,690 residential and 8,940 non-residential transactions.The seasonally adjusted estimate of the number of residential property transactions decreased by 0.6% betweenJune 2013 and July 2013. This month's figure is also 18.5% higher compared to the same month last year.The trend since the beginning of 2012/13 has been an increase in transactions, with a peak and trough in March and April 2012 caused by the ending of SDLT first time buyer's relief.
The number of non-seasonally adjustedtransactions is the highest it's been since December 2009. The seasonally adjusted number of transactions hasalso been rising in recent months, although there was a slight fall in April 2013.The long term movement in the number of residential property transactions reflects the general performance of the housing market over the past eight years.
The seasonally adjusted transaction estimate shows a distinct peak at December 2009. This is associated with the end of the Stamp Duty Land Tax 'holiday', during which the lower tax threshold was temporarily raised to 175,000. The forestalling effects of this 'holiday' coming to an end also show as higher than normal transactions in the previous few months as homebuyers brought forward their purchases. There is a corresponding drop in the early months of 2010. There is another, smaller, peak and trough in March and April 2012 due to the ending of the SDLT first time buyers' relief.
This relief was in effect from 25 March 2010 to 24 March 2012 inclusive. Around 7,000 transactions per month benefitted from this relief, although this number doubled in its final month. Peter Rollings, CEO at Marsh & Parsons, comments: "Despite a slight dip between June and July, the overarching trend is a steady increase in property transactions, with an 18.5% uplift compared to last year. The main difference in the property market compared to last year is the huge pick-up in positive sentiment. Initiatives such as Help to Buy are creating genuine confidence in the market and a sense of fluidity that is rippling across all areas of the UK. The fact that low interest rates are almost guaranteed for the foreseeable future will also help to build confidence in buyers' finances and continue to buoy demand further.
"However, a comparison between this year's figures and those of 2006 tells a rather different story. Despite improvement in the market, the number of transactions this past year is only just over half that from the same point in 2006. This historically low supply of property to buy is holding back the property market from achieving its full potential and fuelling price rises. With so many buyers flooding the market, it is an excellent time to sell property."