Property transactions up 20% in a year, but no bubble
Tue 24 Sep 2013
House buying transactions leapt 20% in the year to August, new HMRC figures show, but mortgage experts see little sign of the much-heralded housing bubble.
Rather than worrying about the housing market overheating, the government needs to do more to make sure the recovery is sustainable, and scrapping "punitive" stamp duty would be a start, experts say.
Residential property transactions were 0.4% higher in August and July and 19% higher than in August 2012, according to figures from the HM Revenue & Customs' stamp duty land tax database. Ben Thompson, managing director of the Legal & General Mortgage Club, said: With all that has been done to stimulate the market it is unsurprising and pleasing to see such an improvement in the number of housing transactions reported by HMRC.
"While talk of a bubble persists its important to remember that the recovery is still very regional in nature. There is still work to be done to ensure the improvement continues in a sustainable way.
"In fact, further measures to alleviate restrictions on buyers and sellers may be a good idea. Removing the punitive effect of stamp duty would have an even more positive effect on affordability and transactions and it is something government should seriously consider.
Peter Rollings, CEO at Marsh & Parsons, said: These figures demonstrate the continuing upwards trend in the UK housing market which began in December 2008. But the volume of transactions is still just over half that recorded during the market highs of 2007. With this in mind, these UK figures do not represent a housing bubble, but a steady recovery in which the UK market continues its orderly rise.
However, the London property market has noticed a much more rapid growth in recent years. London is a market within a market, where the price of property bears little relationship to earning multiples and affordability.
"Ultimately it relates to supply and demand, and while there are 18 buyers for every available purchase, property is changing hands in record time and for close to the asking price.
"While interest rates remain low, prime London property will continue to be seen as an attractive investment opportunity for both UK and overseas buyers, and prices will remain high. But with more property changing hands in London, it will hopefully help to stabilise price growth.