The number of home sales fell sharply in the year to September, the latest figures from the tax office show.
According to the provisional figures from HMRC, which may yet be revised, there were 93,100 residential transactions secured during September, down 4.3% on the typically quiet August a month earlier.
The housing market has been adversely affected by affordability concerns for many homebuyers, particularly first-time purchasers, owed largely to the supply-demand imbalance in the market, the introduction of a 3% stamp duty surcharge for those acquiring additional homes and buy to-let properties, not to mention heightened political and economical uncertainty following the Brexit vote.
“This data is probably the truest set of figures we have seen since the referendum, as property transactions drift down, perhaps due to uncertainty and the recognised issue of unaffordability for some buyers,” said Richard Sexton, director of e.surv.
He continued: “The fall in property transactions highlights the fact that many buyers are being priced out of the market completely, as property prices continue their steady climb, driven by a shortage of supply. This situation is clearly not desirable for those looking to enter the market. The government needs to address the issue sooner rather than later by prioritising the need for more housing and working with the industry to build more homes across the country. With careful nurturing, the housing market is well placed to be a stalwart of the UK economy in the face of wider uncertainty.”
Nick Davies, head of residential development at Stirling Ackroyd, agreed that home sales have slowed largely because of the shortage of homes coming onto market, while demand from homebuyers has increased on the back of record-low borrowing rates, which is both “reducing sales” and “driving up house prices”.
He commented: “If government wants to support the property sector and help first-time buyers, they will need to increase the circulation of homes on the market. In order to achieve this, they first need significantly step-up the construction of new homes - David Cameron’s government built the fewest new homes of any administration since the 1920s. Theresa May must do better.
“More also needs to be done to encourage older people to consider downsizing, freeing up more homes for families and younger buyers. Reducing stamp duty rates would provide a greater incentive to move home, increasing the flow of properties onto the market and ensuring house prices remained stable.”