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Property sales market slumps to slowest June for nine years - HMRC

House price indices may be reporting record rises but sales seem to be slowing.

The latest HMRC property transactions data for June shows there were 96,920 sales last month, on a non-seasonally adjusted basis, the third slowest June for a decade and down 4% on June 2019.

The figure is down 55% annually, although that is compared with the busy stamp duty holiday rush period.

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On a monthly basis, sales are down 3.1%, according to the HMRC data.

The seasonally adjusted estimate of UK residential transactions in June 2022 was 95,420 sales - 54.3% lower than June 2021 and 7.9% lower than May 2022.

The figures are based on stamp duty submissions so there can be a lag.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown said this is meant to be bumper house buying season, but sales have started drying up.

She said: “Aside from a low point early in the pandemic, we haven’t seen a June this slow in nine years.

“The spectacular drop from a year earlier needs to be taken with a pinch of salt, because this was the peak of the market, when we saw a stampede of buyers desperate to complete before the stamp duty holiday became decidedly less attractive. However, the monthly movements are starting to add up to a general downwards trend.

“We had seen higher sales in May, but lines are never entirely straight when you’re following the property market. It’s like walking a dog towards town.”
 

Coles said tracing the property market’s path is going to be a “complex zig zag.”

She added: “Over time you can see where it’s heading, and property sales figures are heading slowly south.

“This owes something to the fact that it’s still incredibly difficult to find somewhere to buy.”

Coles said this was due to excess demand compared with supply as well as those who are buying becoming more cautious.

Nick Leeming, chairman of Jackson-Stops, was more optimistic.

He said: “It’s important to caveat that if we look at these figures across the past five years, clocking up just over 95,000 transaction in June still sits comfortably close to the pre-pandemic 100,000 monthly average. 

“In 2021, June’s unprecedented pent-up market saw figures reach over double this, thanks to the race to beat the stamp duty holiday deadline and buyers re-entering the market post-lockdown.

“As the market steadies after two years of turbulence, it’s good to see activity continuing, underpinned by an era of low stock and high demand. However to ensure activity remains buoyant during an unfamiliar period of record inflation and high interest rates for many, we would like to see lenders respond quickly and proactively to help those affected at the lower end of the market to safeguard timely completions.

“Overall, house prices are much steadier than six months ago, with previous wild spikes in values now cooling back down to the realms of normality. It will be homes that are over optimistically priced to test the market that may fall victim to much lengthier transaction times, with an increased likelihood of down valuations and unprepared buyers. Spiralling delays are currently causing the average UK transaction to take in the region of 150 days from offer through to completion. 

“We advise sellers to remain sensible and know that it may not be the highest price that wins the day, but the buyer in the best position to get to the finish line.”

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