Compared to the same month last year, seasonally adjusted transaction numbers jumped by 36.7 per cent. However, the department cautioned that this was in light of “un-seasonally low” activity in July 2021 as transactions surged in June last year due to people taking advantage of the higher threshold of the stamp duty holiday.
Residential transactions have remained fairly stable in recent months and above pre-pandemic levels. In comparison, there were 98,250 transactions in July 2019, 98,690 in 2018 and 103,480 in 2017. July’s numbers were also the highest since 2015.
HMRC said the level of transactions generally followed historically seasonal trends of increased activity during the summer months.
Non-seasonally adjusted transaction numbers in July came to 110,970, which was 7.2 per cent higher than June and 32.9 per cent up on the year before.
Not yet put off by economic uncertainty
Richard Pike, chief sales and marketing officer at Phoebus Software, said the market may have expected to see transaction levels fall considering rising interest rates and “raging” inflation, but added: “To discover that this was not the case and that figures are ‘broadly’ in line with previous transactions in July is heartening.”
He said: “It shows that there is still an appetite to move, buy and sell and that the effect of rising mortgage rates is not the deterrent we might have expected.
“Nonetheless, there are many factors that can still affect the housing market and, as reported last week by the Office for National Statistics with real wages shrinking when held up to inflation it could be that the appetite we have been seeing is curbed. Affordability will be a defining factor and although lenders have more freedom since the affordability regulations were relaxed, common sense must prevail.”
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The market tends to fluctuate, and boom in summer, but if you look at overall trends, sales have been gradually falling since the start of the year.”
Coles also said many of these sales would have been agreed in March and April, before the full impact of the cost-of-living crisis took hold.
She added: “The number of properties for sale has fallen again in the months since, and buyers are thinner on the ground too. The Royal Institution of Chartered Surveyors’ residential market surveys show new buyer numbers have been falling since May. They also show that existing buyers are increasingly sensitive to wider market forces, so more sales are falling through.
“We don’t expect a straight line downwards, because the property market isn’t full of mathematicians making clever calculations – it consists of humans with their own individual circumstances and motivations. However, we do expect the market to keep trending downward as we head into the autumn.”
Race to secure beneficial rates and house sales
Andy Sommerville, director at Search Acumen, said the fact that transactions were levelling out could be a sign of more supply allowing buyers to enter the market.
He added: “As homebuyers race to lock-in better mortgage rates while still available, we might also see a slew of properties come to market as sellers look to take advantage before house prices drop too far. An uptick in supply may not translate to fewer transactions, meaning it is entirely possible to see an extended period of strong transactional activity this autumn despite economic headwinds.
“These competing dynamics may push and pull the market in different directions and offset each other to some degree. Meanwhile, many caseloads remain victim to stifling backlogs and inefficiencies, keeping conveyancers on their toes.”
