Stutter but no sharp fall in transactions post-Brexit

0.9% dip between June and July

The seasonally-adjusted UK resi transaction count for July – the first full month post-referendum – has come in at 94,550.

That means there was a 0.9% dip between June and July, although July’s tally was 8.3% down on the same month last year.

On a non-adjusted basis, the number of resi transactions was about 0.7% higher than in June, but 13.6% lower than in July 2015.

JulyHMRC

Andrew Bridges, MD of Stirling Ackroyd: “There’s been a slight stutter in the property markets post-referendum recovery – but it’s no cause for alarm. It’s the usual suspects making moving on to and up the ladder a challenge. Stamp duty is certainly a barrier, alongside the difficulty of deposit-saving for many, and the latest Help to Buy ISA news will do little to inspire hope for London’s first-time buyers. In London these problems will sharpen over the next couple of months as lower interest rates encourage buyers to grab a property with a cheaper mortgage, putting those with small deposits at a disadvantage. The only solution to the crisis is to build our way out of the rapid house price inflation we have seen in recent years, and ensure there are enough high quality homes on the market. More new homes are being approved in London, but not nearly enough to provide enough homes to soothe demand. Newham rejected 92% of possible new home approvals last quarter, and this approach is unsustainable. People can only move if there are homes to move into and right now London is failing to provide.”

Andy Sommerville, Director of Search Acumen: “After the ups and downs of the past few months, today’s transaction statistics suggest the market is stabilising, as the month-on-month change sits at under one percent. Many would have expected a sharp fall in transaction activity in what was the first full month in our post-referendum economy, yet an underwhelming change suggests the darkness in our market shows little sign of worsening. Despite the encouraging resilience the market has shown in the short term, the bigger picture reveals an 8.3% decrease in transactions since July last year, demonstrating the true hit we’ve taken from Brexit, combined with the underlying issue of affordability. As our economy absorbs the shock of the past three months, it is positive that homebuyers are being given a leg-up into the property market to reignite demand and boost our industry.”

Doug Crawford, CEO of My Home Move: “The minimal fall in transaction numbers between June and July shows that the property market largely shook off the short-term uncertainty of the Brexit vote. Following the referendum there was talk that the market would be quickly affected by the outcome, but these fears have been allayed with residential transactions falling by just 0.9% month on month. While transaction levels remain lower than a year ago, this is in the context of a market that is still feeling the effects of changes to Stamp Duty, which led to a frontloaded first quarter. Today’s figures reflect our own experiences of the market. Following the referendum the vast majority of purchases went ahead without any issue, and chains were largely unaffected. In the medium term the market will remain stable, and our view is that it is strong enough to weather mild economic uncertainty. In the long term, strong fundamentals will continue to support a prosperous housing market. High levels of demand for both rental and owner-occupied accommodation will drive transaction figures upwards, and our recently published forecast predicts the number of property transactions will rise by 20% by 2020.”