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Wednesday, December 1, 2021

Worst October for house sales since financial crisis

From July 2020, buyers in England and Northern Ireland could save up to £15,000 if they completed sales before June 30 2021. From July to September 30 this year, the most you could save was £2,500. 

Across this period, total transactions in England and Northern Ireland were up 270,000 on the same period to September 2019, according to analysis by Savills estate agents. Above £500,000, where buyers could benefit from the maximum £15,000 saving in the more generous stage of the stamp duty holiday, transactions increased by 70pc.

This surge was so extreme that the Treasury only lost £1bn, despite the fact that buyers saved a total of £6.4bn in stamp duty.

The October transaction figures represented the first time in 15 months there wasn’t a financial incentive to buy property.

Antony Codling, of Twindig analysts, said the housing market’s hangover had begun.

But Lawrence Bowles, of Savills, noted that the October drop was still marginally higher than the number recorded in July, when transactions plunged after the tax break tapered. “That suggests low interest rates and a pent up desire to move home continue to sustain activity,” said Mr Bowles.

“That points to a gradual normalisation of the market, with transactions likely to slow because of the depleted levels of available stock on the market given the extent of buying activity over the past 18 months, rather than an underlying lack of buyer demand,” he added.

As high inflation continues, however, a succession of rises in the Bank Rate are imminent. Mortgage rates will soon rise, which will hit affordability.

The national statistics also conceal major regional diversions. Activity in the central London market has accelerated with the return to the office and the increasing ease of international travel, which have had more impact than the end of the tax break. 

Guy Gittins, of Chestertons estate agents said: “At the end of October, our new buyer enquiries were up 18pc compared to this time last year when we had the added urgency and incentive of the stamp duty holiday.” Agreed sales across Chestertons’ London offices rose by 26pc compared to September.

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