Home Correction journal Annual home sales rose 7.6% in August

Annual home sales rose 7.6% in August

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The number of home 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 property transactions took place in the UK in August, 1.1% more than in July and 7.6% more than in August 2021.

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

Spikes in house sales were recorded in June and September last year as the ‘zero rate’ stamp duty holiday band was gradually reduced, as the break was phased out, and Homebuyers rushed to strike deals to maximize stamp duty savings.

The HMRC report said: “August 2021 fell between two transaction peaks in June and September 2021, causing non-seasonal trends over this period.”

A Times report, ahead of the government’s mini-budget on Friday, suggests further stamp duty reduction plans are in the works, as part of efforts to spur economic growth.

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

Financial experts have suggested that the rate could rise 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 in the new year, potential buyers who make the sums will find that their monthly payments will be that much higher. , which will deter them from buying a property.

“As transactions take around three months, these numbers reflect activity at the start of the year. It will be interesting to see where the statistics stand at the end of the year, once the rising costs of and mortgages will have had an impact.

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

“There is no sign of a price correction yet, but it is clear that the government is sensitive to even a relatively small drop in transactions, prompting talk of lowering the stamp duty.”

Matthew Thompson, head of sales at London estate agent Chestertons, said: “Despite rising interest rates and the cost of living crisis, August remained a busy month for the London property market. . The number of buyer inquiries alone is up 35% from August of last year.

“One of the drivers of housing demand is the return of professionals who are looking for a property closer to their work.”

Jason Tebb, managing director of property research website OnTheMarket.com, said: “Our own data indicates that sentiment remained positive in August, with 79% of sellers confident they could close a sale within three months. “

Andrew Montlake, managing director of mortgage broker Coreco, said: “While we are likely to get a big rate hike this week, for many people it will still be cheaper to own than to rent and that is driving growth. ‘activity.

“The news that the stamp duty is about to be reduced is likely to ignite a match below transaction levels. However, if it pushes prices up further, it certainly won’t help first-time buyers who are already dealing with rapidly rising mortgage rates and increases in the cost of living.

“Get it right, though, and in the medium to long term we might just see a market with more transactions rather than a market where the stamp duty acts as an additional deterrent to moving.”