The number of transactions in the UK property sector fell again between July and August. This could be seen as evidence that the property market is beginning to stagnate.
Figures from HM Revenues and Customs (HMRC) showed a fall of 0.5% to 103,490 transactions between July and August 2017. The figures are worked out on a seasonally adjusted basis.
This figure is still 6.6% higher than 2016, but HMRC was careful to point out that it is flat when compared with figures from 2015. The agency said that caution should be used when making transaction comparisons between August 2016 and August 2017 due to the significant changes in behaviour since the EU referendum in June 2016 and the General Election of June 2017.
Property market suffering
Buyers have altered their transaction behaviour due to the uncertainty caused by the political situation, as well as the stamp duty increase in 2016. This makes it difficult to predict the short-term future of the market, but these figures do suggest that the UK’s property market is starting to suffer under the pressures of change.
The National Association of Estate Agents (NAEA) published information recently that seemed to suggest the number of homes on estate agents’ lists is the lowest it’s been for any month of July since 2002.
House price index
The much-watched house price index produced by Rightmove also showed recently that the average asking price for a property in the UK fell 1.2% from 9 August to 9 September 2017. This represents the third such fall in just four months.
Changes in the market balance are evidenced by the difference in numbers of new sellers and buyers entering. While it’s been reasonably balanced for a while now, it seems that a buyers’ market could be emerging due to the number of new sellers rapidly rising.
Long period of uncertainty
Other industry experts suggest that some sellers are waiting to find out about the impact of the likely interest rate rise by the Bank of England. There is much speculation in the sector about when a base rate increase will happen, and it’s to be expected that this will have some effect on the property market.
As the UK is set to leave the EU in March 2019, there will undoubtedly be a decent period of uncertainty. However, it’s more than likely that the property sector can withstand the changes occurring and provide stability for consumers and investors.
– Richard Carr
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