The UK housing market took a turn for the worse last month, with the number of property transactions falling by over 3,000.
According to figures from HM Revenue and Customs, the number of residential property transactions fell by 3.3% to 96,910 between May and June – the lowest since October 2016.
Andy Sommerville, director of Search Acumen, “While temperatures have soared this summer, the property market has seen only a gradual uptick in transactions during recent months. Factoring in seasonal adjustments leaves activity looking fairly flat, and it’s no coincidence that an unexpected election result has coincided with the first drop in monthly residential and non-residential transactions to below 100,000 and 10,000 respectively this year.
“Nevertheless, given the economic uncertainty, we’re still looking at a property market that has more strength and stability than many might have predicted a year ago following the result of the EU referendum.”
According to the Royal Institute of Chartered Surveyors, the average stock on surveyors’ books has hit a new low, highlighting the ongoing supply shortage.
Its latest survey of the property market showed new instructions fell for the sixteenth month in a row, with 19% more respondents seeing a fall rather than rise in property coming on to the market.
Brian Murphy, head of lending for Mortgage Advice Bureau, said: “Of course, buyers can only purchase what is available on the market for sale, and as recent reports from other industry bodies, such as RICS suggest, homes for sale in many areas of the country are approaching record low numbers, which may as yet be reflected in the number of transactions completed in the next few months.
“But what HMRC’s report today does suggest is that people still want to buy property, and that demand for housing would appear to have been undiminished, no doubt assisted by the ongoing accessibility of record low mortgage deals, which is an underlying yet key factor to ongoing market stability.”
Political uncertainty surrounding Brexit and the snap general election has weighed on the housing market in recent months, with house prices and mortgage approvals both falling.
According to the latest Halifax House Price Index, annual house price growth eased to 2.6% in June, down from 3.3% in May – the lowest rate since May 2013.
Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said: “There’s been a lot of talk recently of the property market cooling off, and despite a slight increase in transaction levels in May, there are now fewer properties changing hands than in the month prior.
“This suggests that buyers and sellers are feeling slightly less confident about the future of the property market, unwilling to press ahead with purchases, perhaps due to the somewhat ominous political backdrop. There’s also the possibility that buyers are sitting on their hands until they know the full extent of the recent fall in house prices in June.”
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