Sales fall by a third, but house sales horror is yet to come
Property sales (non-seasonally adjusted) were down 32% in a year in September, but it’s not what it seems, because they were very similar to the previous month – at 112,370.
HMRC warned against annual comparisons, because last year’s sales were massively distorted by the rush to take advantage of the stamp duty holiday. Sales are steady, and above pre-pandemic levels (13% above September 2019). It’s the second busiest September in a decade.
HMRC published monthly property sales for September: UK monthly property transactions commentary – GOV.UK (www.gov.uk)
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “House sales plummeted by a third in the year to September, but this shuddering drop isn’t what it seems, because September sales were actually well above their pre-pandemic levels. They were just being compared with a huge spike when the stamp duty holiday came to an end. The real house sales horror story will play out in the coming months.
“Sales completing in September were largely agreed around June, when demand had started to drop back a little, as rising prices persuaded some to rethink. However, while mortgage rates were rising, the average two-year fixed rate was 3.61% (according to Moneyfacts), so for an awful lot of buyers, monthly payments still felt within the realms of affordability.
“Sales agreed in the coming weeks are likely to look far uglier, as the chaos unleashed by the mini-budget pushed mortgages well out of reach for an awful lot of buyers. Moneyfacts puts the average two-year fixed rate almost three percentage points higher than the June figure – at a 14-year high of 6.53%. We can expect this to hit completion figures towards the end of this year and into the beginning of 2023, when today’s sense of mounting dread feeds into the figures.”