Sales volumes across the UK plunged year on year this summer.
According to the new official Government survey, on an annual basis transactions were heavily down in every country – and by almost one third in England.
The data relates to June, the latest month for which transaction data is available.
While June’s sales volumes were little different from May’s, the survey does say that home sales in the UK remained ‘stable’ between July and August, suggesting little pick-up.
In England, transactions stood at 57,637, 32.2% down from the 85,020 recorded in June 2015.
In Wales, sales dropped 27.1%, from 4,181 to 3,046. In Scotland, the drop was 7.4%, down from 9,307 to 8,620. In Northern Ireland, sales were 21.6% in the second quarter of the year, falling from 5,200 to 4,075.
Overall, sales are below the levels of June 2013, 2014 and 2015, and comparable to those in June 2012.
The official index also shows that the average price of a property in the UK was £218,964 in August – up 1.3% on a monthly basis and 8.4% annually.
According to the new official Government survey, average prices ranged from £123,241 in Northern Ireland (for the second quarter of this year) to £235,573 in England.
In Scotland the average house price was £144,561 and in Wales £144,514.
The average house price in London was £448,908.
The survey is calculated by the Office for National Statistics using data provided by bodies including the Land Registry.
OK George, looks like you did one of your excellent meddling jobs before she kicked you out! Stamp Duty for 2nd purchase etc – this gets developers too – up by 3% but does this compensate for reducing market activity by 30%? Don’t believe it’s Brexit causing it just the bringing forward of transactions to beat the SDLT hike followed by people deciding to postpone investment after the cut off.
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Completely agree clarky46
The huge rise in transactions we saw in March for those trying to beat the Stamp Duty trap have simply had a knock-on effect over the following months. For my business March represented just under 25% of turnover for the financial year and April May and June were decidedly quiet. In my opinion Brexit caused uncertainty and with uncertainty comes inaction which translated to a poor July but other than that it has had little effect on the market.
It’s an unusual year with unusual events so it’s almost impossible to draw comparisons with earlier years.
August is always a quiet month for us but we noticed an increase in activity at the beginning of September. We are still short of stock and while some properties are going over guide due to competitive bidding this is happening less and less. Prices have stabilised and dropped slightly in some areas but demand remains good.
SDLT needs to be addressed, the government wanted to slow down the investor market to make way for first time buyers but simply didn’t think the process through. What used to be a very straight forward tax is now so complicated that we are being invited to seminars to fully understand its implications. Add it to the list of mistakes that include HIP’s and put it back to what it was. Then after apologising to our industry please remember that the property market reacts in a number of ways to outside forces so stop meddling in a process that you clearly do not understand.
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EYE : please put a maximum word limit on your comments…like this:
We were busy, tories did a speech , we might go bust… cheers tories, everytime they talk they create a recession or instability. #gramma skoolz
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There is absolutely no doubt that a severe lack of supply is leading to an unpresidented rise in asking prices in areas local to us. I have no doubt that a significant contribution to the lack of supply are the new rules that were brought in by lenders after the mortgage market review a couple of years back. Many people, who in the past would have ‘moved sideways’ to relocate areas for jobs or family, are no longer able to do so. Even though they might only wish to transfer their existing mortgage (without extra borrowing) to a new property, they are either unhappy to go through the affordability checks or simply can’t pass them. As many people who would have moved in the past, just ‘sit tight’, other people delay coming to market because they simply cannot see anything available they would choose to move to.
If we are not careful this downward trend on instructions could become self propelling. So prices are going up, and first time buyers start to struggle even more ….at a time when some schemes designed to help them are now on limited time.
There will come a time when the ‘powers that be’ recognise that this situation is a real drag on ‘mobility to work’ and the economy overall. However, judging by my lifetimes experience, I doubt if it will happen quickly….. and will only be seen when the damage done is enormous.
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A client of mine told me a story a year or so ago of a friend he had. I have no reason to believe this was anything but the absolute truth. His friend had a business that had fallen on harder times and he was worried he would start to struggle with his mortgage payments. He set up a meeting with his lender to explain the situation. He asked them if there was anything he could do…. especially as he had been an exemplary customer, never missing a payment. The person he saw, said he was on a scheme paying over 5% and if he payed a small redemption penalty he could transfer to a new scheme at less than 3%, virtually halving his payments. He was delighted and offered to transfer savings immediately to cover the small redemption penalty. However the employee said he would have to apply and go through the affordability checks first….before the transfer to the new scheme could take place.
Guess what!! Because of his latest circumstances he failed the checks and ‘the computer said no’. The lender said he would have to remain on his existing scheme and the higher interest rate, until the end date!
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Agent V The guy had a result. I would have expected them to call in the loan because he had now shown that he couldn’t afford the mortgage at 3% never mind 5%. Lenders are not nice guys
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Back to the same old issue, too many investors are putting their money into private rentals and pushing the rental prices to the max, making them unaffordable even for working professionals! Thereby the whole thing is putting a strain on housing, employment, benefits etc etc etc. We need to change this cycle and deter investors away from rental property and back to the banks by introducing a higher interest rate for savers, this will then bring down the cost of rentals and actually help first time buyers to actually save for a deposit whilst they are renting and then the properties will be affordable for them to purchase. At the moment fat cat landlords are exploiting tenants who have no other option other than to pay their costly rentals!
We need to encourage people to aim for their own property and give them hope that if they work hard, they will save for their own property, not the rent is too expensive in line with their salary and the only other option is to be unemployed and claim benefits that pay the rent – not the way society should be heading these days
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JSSoxted58
Seriously!
You actually believe that FTBs can’t buy because of to quote “fat cat landlords”. Not the forty years of successive governments failure to build homes. Not because of council house sell offs. Not because of strict affordability checks. Not because of lenders demands for higher deposits. Not because of the UKs supply demand imbalance. For you it’s the landlords fault.
Unbelievable. Displaying a fundamental lack of understanding of the dynamics of the UK property market. Blame the landlords.
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The next 2 years are going to be tough.
Many agents will go down and we’ll even in the next 6-12 months see one of the very big budgets go down as VCs pull backing.
Equally heard last night at a dinner out how an ex regional director (friend) for one of the big corporates (no longer there) sold 3 luxury homes in Kent (£500-600k) via an independent in last few months and none sold via portals
Agents need to look closer at their marketing spend, and where they market
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But would they have got the instruction if werent on a portal . Talking rubbish chap
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it is goin got be tough though , granted.
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“…an ex regional director (friend) for one of the big corporates (no longer there) sold 3 luxury homes in Kent (£500-600k) via an independent in last few months and none sold via portals”
So… maybe – just maybe – you can STFU about the effectiveness or otherwise of OTM and leave them to plug away at the other ineffective portals like they set out to do.
Surely it doesn’t matter whether (in your opinion) they are placing restrictive practices or not – if they’re all as much use as chocolate fireguards?
Otherwise – what’s your REAL problem with them?
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Well folks AgentV pretty much summed it all up for me. Sitting here in the Midlands I can tell you, it’s not all about London, the South East or BTL landlords even. I appreciate Stamp Duty hikes and the like may be playing a part for some but heck you can’t blame it for all the market’s woes, they have only minor relevance here. Take our own location in the Midlands and I would say it’s generally a different set of circumstances. Since implementation following MMR increasingly a lot of people are simply finding themselves frozen out. That’s a major problem They just don’t meet the stricter lending criteria anymore. They can’t move upwards, they can’t even move sideways. Even record ultra-low interest rates can’t help them. This has been in part a factor in the gradual decline of stock coming to market over increasing time and compounding the many problems, thus prices push up even further, the more they go up the less people can afford and simply stay put and so on and so on – a vicious cycle.
It’s simply about affordability.
Example for you – In sunny old Wolves the average total household income according to ONS (2015) is £23,600. Average Full time wages are £23,972 and average wages overall (Inc. part time/zero hours etc.) are but only £19,656 ( that’s before stoppages remember) Gross disposable income per household was £13,414 (2014) (Yeah, were a poor city). Then consider the average property sale values – £165,301 for Wolverhampton according to our friends at Rightmove, or £147,893 year to date according to the Land Registry ? ‘Lies damn lies and statistics’ I hear you shout. Either way, do the math! it’s all about affordability (and jumping through the lenders hoops). Ultimately we need far more affordable homes for your average joe. … and if ever interest rates were to normalise….
Now don’t even get me started on the increasing rush to the bottom re commission fees that more and more agents seem to be offering to try and obtain new instructions – frightening.
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Hi AJW,
We’re in the Midlands as well. Two or three years ago prices were fairly stable and I was hoping they would only gradually increase to enable wages to gradually catch up…. particularly for the most innocent hard done by group of people affected by the quagmire of the banking crisis …First Time Buyers. However prices have now increased by over 20% because of the rising demand and lack of equalisation in supply.
To cap it all, what none of the politicians seem to appreciate, is that if we trap increasing numbers of young people into renting all their lives…. who is going to pay all their rents when they retire on what are expected to be much poorer pensions in the future?
We are feeding a long term ticking timebomb in this country, of exponential increase in welfare benefits…..just to pay for housing for retired people.
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Good morning. Too true on all counts AgentV. The markets not truly functioning effectively, hasn’t been for a while and it’s becoming more dysfunctional of late.
You can keep kicking the can down the road but it’s not going away. Many reasons, many opinions. I won’t go into my own thoughts of them all here and now – shucks, it would be far too rambling!
However simplistic as it may seem the bottom-line is build more houses and at more affordable prices for the many.
(Oh and as an amendment, Wolves isn’t the most affluent City, but we are by and large a happy bunch).
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“Bless you” – An agency news site with a word limit – not going to happen – just look at the verbose comments above – when will our industry learn that less can be more!?
Anyway to the news subject – HMRC are reaping what they have sowed over the past few years – massive increases in moving tax = less people move = less net tax!
Cant believe that is to difficult even for gormless George to have worked out this would happen – perhaps those Conservative Eton boys really are completely out of touch with real world!?
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