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Residential property sales broadly stable

Residential property sales in August remained broadly stable year on year, with just a 0.9% drop from 2018, the latest official figures show, a significant 15.8% rise month on month.

The data from HMRC also shows that overall there were 99,890 residential transactions and 11,300 non-residential transaction.

Non-residential sales were up 8.7% compared with August 2018 and significantly higher by 29% compared with July 2019.

But Neil Knight, Spicerhaart part exchange and assisted move business development director, pointed out that comparing year to date totals, the market is still lagging somewhat behind where it was in 2018, with some 30,000 fewer transactions than by this stage last year.

He believes this possibly reflects the heightened uncertainty around the nature and timing of Brexit. ‘What we are seeing at Spicerhaart is much more in line with last month’s more buoyant figures, and consistent with reports from the National House Building Council which painted a more optimistic picture of the market,’ he said.

‘We’re clear that there is plenty of demand out there: regardless of political uncertainty people still need and want to move house,’ he added.

According to Adrian Moloney, sales director at OneSavings Banks, the slight upturn in activity is good news for the sector. ‘While it’s too soon to suggest that this increase in transactions is a sign of what’s to come, the market is showing some form of resilience,’ he explained.

‘For buyers and landlords with capital, there are bargains to be had, and it appears that many are abandoning the wait and see approach in favour of just getting on with it. Mortgage rates are very competitive, employment is high and earnings have improved, so there are reasons to be positive,’ he said.

‘As we reach the tail end of 2019, we continue to wait for any sign of commitment from the Government to boost activity in the market, and this has to start with an increase in the number of houses built. Until buyers receive some clarity, we are unlikely to see a return to form,’ he added.

Mike Scott, chief property analyst at full service estate agent Yopa, also believes that the current market is affected by would-be buyers waiting for more certainty and failing to agree home purchases.

‘Those sales would then have gone on to complete over the summer. The number of sales reported should now stay at normal levels for the rest of the year, and then fall again in the new year as the October Brexit deadline starts to hit the numbers,’ he said.

But Joshua Elash, director of property lender MT Finance, pointed out that the market is also being affected by what he calls ‘an overly-aggressive stamp duty regime and broader macro-economic uncertainty’.

‘’The market needs a catalyst in the form of either visibility on the Brexit end-game or stimulus in the form of stamp duty reform. This is evidenced by the contrasting increase in volumes in commercial property, which is subject to different stamp duty levies. If HMRC wants to generate greater revenues, it needs to encourage greater transactional volumes by reforming or rolling back the stamp duty regime on residential property,’ he added.