Summer property boom defies the gloom
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the HMRC monthly property sales for August
Key points from publication:
- Property sales (non-seasonally adjusted) were114,440 in August – up 4.4% in a month and 9.7% in a year.
- HMRC warned against annual comparisons, because last year was a lull between stamp duty deadline rushes.
- Sales are steady, and above pre-pandemic levels.
Sarah Coles says:
“House sales held up in August, as the usual seasonal rush endured, despite dwindling supplies and rising pressures on buyers. However, concerns for the future continue to mount.
Sales completing in August were largely agreed in April and May, when the pain of energy price rises was already being felt. On the one hand, this is a clear indication that those who have enough cash to see them through this crisis are still prepared to dig deep for property. On the other, it’s still early days. We know that demand only really started to fall from May when people had time to adjust to their new outgoings, and reconsider a move up the property ladder. At the same point, agents started to report that buyers were getting increasingly cautious, so we can expect some of this to show in the figures as we move into the autumn.
The very fact that we’re hearing reports that the government is considering a Stamp Duty holiday is a sign that they are worried. We will have to wait to see whether this comes to fruition. If it does, we don’t know whether it will effectively stimulate demand or whether we have stamp duty holiday fatigue at this stage. If it does encourage more buyers into the market, with an average of 36 properties on each agent’s books, we’re still close to an all-time low in the availability of property for sale. Driving demand without addressing supply would risk more buyers chasing a tiny number of properties, which would push prices up. This would mean higher monthly mortgage costs, which in itself could be enough to put buyers off. So if life continues to get increasingly expensive, a Stamp Duty holiday wouldn’t necessarily be enough to stop the housing market slowing significantly.”
Kindly shared by Hargreaves Lansdown
Main article photo courtesy of Pixabay
