Statistics released by HMRC on the number of property transactions registered for houses valued at 40,000 or more highlighted both a monthly and yearly decline in activity.
September was the first month since April to record a fall in residential transactions. Between March and April this year, transactions fell by 55% from 179,390 to 80,370 before beginning a steady monthly climb thereafter.
Year-on-year, property transactions last month fell by 11.3% from 105,000.
Richard Sexton, director of e.surv, said: “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.
“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.”
Buying a property in August was almost 7% more expensive than the same month of the previous year, according to the latest Halifax House Price Index.
A slight drop of 0.2% was recorded between July and August but Rightmove reported asking prices rose in September after a two-month dip. The 0.9% increase in asking prices last month drove up the average house price listing to £309,122.
Nick Davies, head of residential development at Stirling Ackroyd, said property sales had slowed in September due to a shortage of homes coming onto market, putting pressure on Theresa May to do a better job at improving construction levels than her predecessor David Cameron.
He added that a reduction in 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.
In February, a review of the UK’s construction labour model was commissioned by Cameron’s government. CEO of construction consultancy Cast, Mark Farmer, who led the review, this month recommended the launch of a pilot programme, which would test the use of pre-manufactured construction in the residential space. He asserted that new forms of off-site construction could help to resolve the country’s housing shortage.
Talking to sister title Specialist Lending Solutions, Zing Mortgages director Paul Flavin said the construction of off-site modular housing would be a great boost to the supply of cheaper properties.
Considering the market from a buy-to-let perspective, Flavin said: “I am becoming more involved with the world of modular housing seeing it as a true way forward in many areas. In the South East property prices have grown to a point where rental yields can be as low as 3% and 4% meaning landlords aren’t purchasing in these areas. The introduction of a more affordable modular housing package could be the only way to increase rental yields to a sufficient level, encouraging investors to return to these areas.”
