Property transactions fall for first time in five months

The number of property transactions in the UK has fallen month-on-month in June for the first time in five months, HM Revenue and Customs (HMRC) has revealed.

Overall, 91,370 residential property sales took place in June, reflecting a slight fall of less than 1%.

Although this was an 8% increase year-on-year, it is fairly low for the month, with sales averaging 104,957 in June over the last decade.

The number of non-residential property transactions fell both monthly and annually, standing at 9,710 in June.

HMRC’s monthly estimates are based on its own records as well as those of Revenue Scotland and the Welsh Revenue Authority, for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) in each of the three nations respectively.

Head of personal finance at Hargreaves Lansdown, Sarah Coles, said: "June was a bit of a washout for the property market, reflecting the fact that sales were agreed when mortgage rates were gradually climbing earlier this year. For most of the period since, they’ve edged higher, and the Bank of England shows mortgage approvals have suffered. It means sales could look decidedly lacklustre in the coming months.

"Property sales completed in May were likely to have been agreed from around the beginning of March. At the start of that month, the average two-year fixed-rate mortgage was 5.76%, according to Moneyfacts. This was up from 5.56% a month earlier, and was just the start of a slow ascent of mortgage rates. Buyer enthusiasm that had been sparked at the start of the year started to tail off in the face of higher costs."

Managing director at more2life, Ben Waugh, added: "A slight lull in property transactions doesn’t mean that the market has lost the momentum that has been building this year. A price war among major mainstream mortgage lenders has resulted in a string of rate reductions and the gradual return of more competitive products.

"Today’s data is likely a momentary pause before we see a flurry of activity again. With a cut to the Bank of England’s central rate potentially arriving tomorrow, more borrowers might be convinced that the time has come to transact as we move into late summer and beyond."



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