June transactions fall but market weathers Brexit storm

Ryan Bembridge

July 21, 2016

June property transactions fell by 10.2% from the same month last year, HMRC figures show.

There were 94,550 residential and 10,930 non-residential transactions last month, with the number rising by 4.9% from May.

Stephen Smith, director of Legal & General Housing Partnerships, felt the figures were promising enough despite the yearly decline.

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He said: “These figures highlight that the mortgage market has thus far weathered the Brexit storm and continued to grow over the last month.

“Despite this ‘keep calm and carry on’ attitude, annual figures show a significant dip in transaction numbers and it’s important to remember that transactions haven’t seen the same dramatic increases that have characterised lending figures for some time now.

“A supply-demand crisis is continuing to plague our housing market, and the result has been house prices that have risen well above the level of inflation. Without more homes, we’ll only continue to see transactions languish and lending rise as people borrow more to cover the costs of homeownership.”

He added: “To try to resolve this problem, we need to see action from the government to make good on the promises of the previous administration and build more homes.

“We had the promise of a million homes by 2020, now we need to see real, on the ground action to deliver that policy by mobilising the public sector and encouraging private companies to construct the homes we desperately need.”

Doug Crawford, chief executive of My Home Move, reckond the June figures signified a market returning to health.

He said: “The June increase shows that the property market mostly shook off the uncertainty from the Brexit referendum at the end of the month. This reflects our experience – most purchases went ahead without any issues.

“The big question now is what the impact will be for the rest of the year. While this is less clear, our view is that the fundamentals of the property market are strong enough that there will not be a significant impact.

“There have been anecdotal reports of a slight slowdown in July from the estate agents we work with, but it is impossible to tell how much of this is actually Brexit related and how much is down to a normal summer slowdown.

“The picture will only start to be clearer in September after the holiday season.”

Andy Sommerville, director of Search Acumen, was unsurprised by the year-on-year slowdown.

He said: “After the pre-April spike in activity, we now continue to see the stamp duty surcharge slow-down take hold.

“However, homebuyers were also hit by creeping uncertainty ahead of the EU vote.

“All sectors of the UK economy were thrown into a state of uncertainty amidst the referendum vote at the end of June, which will continue to have a knock-on impact on transactions in coming weeks and months.”

“The year on year deterioration in residential transaction figures in June, which today’s HMRC data shows, will not come as a surprise to stakeholders in our industry.”

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