Bumper summer for property is a detour not a change of direction

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the publication of HMRC monthly property sales for July, showing that a bumper summer for property is a detour not a change of direction.

Key points from publication:

• Property sales (non-seasonally adjusted) were 110,970 in July – up 7.2% in a month.
• They were also up 32.9% in a year – but this is measured against a one-off dip in sales after the most generous period of the stamp duty holiday came to an end.
• Sales are higher than pre-pandemic, and up 6% from July 2019. It’s the busiest July since 2015.

Sarah Coles says:

“House sales held up in July, thanks to the usual bumper summer season. However, this is a small detour for the market, rather than a change of direction. So as the summer fades, there’s every chance that the busy property market will do so too.

“The market tends to fluctuate, and boom in summer, but if you look at overall trends, sales have been gradually falling since the start of the year.

“July saw almost 111,000 people get the keys to their new home, with sales only slightly below the 2022 peak in March. This is particularly impressive given that homes for sale have been so thin on the ground.

“However, an awful lot of these sales will have been agreed in March and April, before we were hit by the full impact of the cost-of-living crisis. By the time we reached the summer, the market drained of available property and buyers evaporated, as sky-high energy costs, runaway inflation, rising rates and concerns that worse could be on the way sapped confidence from the market.

“The number of properties for sale has fallen again in the months since, and buyers are thinner on the ground too. The RICS residential market survey show new buyer numbers have been falling since May. They also show that existing buyers are increasingly sensitive to wider market forces, so more sales are falling through.

“We don’t expect a straight line downwards, because the property market isn’t full of mathematicians making clever calculations – it consists of humans with their own individual circumstances and motivations.

“However, we do expect the market to keep trending downward as we head into the autumn.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay