Property transactions down 48.4% in October – HMRC

October saw a 48.4% fall in residential property transactions from September, according to new figures published by HMRC.

The provisional non-seasonally adjusted estimate reached 85,090 for October, which was also a 30.1% drop from the same month last year.

For non-residential transactions, the non-seasonally adjusted estimate of transactions in October was 10,460, which was a figure 1.7% higher than September, and a 7.7% rise from October 2020.

HMRC’s monthly figures cover property transactions completed in the UK with a value of £40,000 or above.

Commenting on the latest release, Just Mortgages national operations director, John Phillips, said that following an “erratic” 18 months, the property market should now settle, with transactions levelling out.
“As the dust settles from the stamp duty holiday, the October figures gave us a clearer picture of the property market,” Phillips said. “The story they tell is an encouraging one, as despite the return of stamp duty, there is still strong demand for property.
“Despite the end of the stamp duty holiday, lenders appear to still be confident in the resilience of the market, and aren’t predicting a drop in prices any time soon. This is clearly demonstrated by the availability of 95% LTV mortgages, which have returned in force over the past few months. This should hopefully bring more first-time buyers to the market, as they are mainly exempt from stamp duty.”

Hargreaves Lansdown personal finance analyst, Sarah Coles, added that the drop from the previous October was “impressively steep”, but highlighted that this was from an “unusually busy” October in 2020.

“Usually after a spike like this, we get a quieter period,” Coles commented. “Add in the fact that we usually get sales tailing off at this end of the year, and it’s fair to expect a degree of hibernation.

“This will be exacerbated by the fact that the number of properties coming to the market has fallen for seven months in a row, and the average agent has just 37 properties on its books, so even if people are keen to buy, there’s hardly anything on the market.

“However, we’re not expecting the market to remain dormant for long. People are still reassessing how and where they want to live in the wake of the pandemic, which is keeping them on the move. And while mortgage rates have crept up slightly, there are still some phenomenally cheap deals around, which is enough to support activity in the market.”

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