26 Sept 2022

Annual house sales increased by 7.6% in August

Annual house sales increased by 7.6% in August

The number of house sales in August was 7.6% higher than the same month a year earlier, according to HM Revenue and Customs (HMRC).

An estimated 104,980 housing transactions took place across the UK in August, which was 1.1% higher than in July and 7.6% up compared with August 2021.

A stamp duty holiday, which ended last year, distorted the year-on-year figures.

Peaks in house sales were recorded in June and September last year as the “nil rate” stamp duty holiday bracket was gradually reduced, as the break was phased out, and home buyers rushed to complete deals to maximise stamp duty savings.

The HMRC report said: “August 2021 was between two transaction peaks in June and September 2021, causing unseasonal patterns during that period.”

A report in The Times, ahead of the Government’s mini-budget on Friday, suggests further plans to cut stamp duty are in the pipeline, as part of efforts to boost economic growth.

The Bank of England is expected to increase the base rate for interest further on Thursday, pushing up costs for some mortgage borrowers.

Finance experts have suggested the rate could jump from 1.75% to 2.25% or even 2.50%.

Gareth Lewis, commercial director of property lender MT Finance, said: “With interest rates likely to rise into the new year, would-be buyers doing the sums will see that their monthly payments will be that much higher, putting them off buying property.

“As transactions take around three months, these figures reflect activity from earlier in the year. It will be interesting to see where the stats lie come the end of the year once higher living and mortgage costs have had an impact.”

Jeremy Leaf, a north London estate agent and a former residential chairman at the Royal Institution of Chartered Surveyors (Rics), said: “Despite the anomalies arising from comparisons with last year, sales are still broadly in line with historic pre-Covid August averages. Transactions, rather than more volatile house prices, are always a better indicator of future activity.

“There is no sign of any correction in prices yet but clearly the Government is sensitive to even a relatively small drop in transactions, prompting talk of lowering stamp duty.”

Matthew Thompson, head of sales at London-based estate agent Chestertons, said: “Despite increasing interest rates and the cost-of-living crisis, August remained a busy month for London’s property market. The number of buyer inquiries alone has risen by 35% compared to August last year.

“One driving force behind the demand for homes is the return of professionals who are looking for a property closer to work.”

Jason Tebb, chief executive of property search website, said: “Our own data indicates that sentiment remained positive in August with 79% of sellers confident they could complete a sale within three months.”

Andrew Montlake, managing director of mortgage broker Coreco, said: “Even though we are likely to get a chunky rate rise this week, for many people it will still be cheaper to own than to rent and that’s driving activity.

“News that stamp duty is set to be cut is likely to light a match under transaction levels. However, if it send prices higher again, this will certainly not help first-time buyers who are already facing rapidly rising mortgage rates and cost-of-living increases.

“Get it right, however, and in the medium to long term we may just see a market with more transactions rather than one where stamp duty acts as a further disincentive to move.”

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