Following three consecutive months of increases, HMRC figures for seasonally adjusted residential transactions in August show a decrease of 2% – from 95,240 in July to 93,630 in August. Non-seasonally adjusted residential transactions increased by 2%.
The non-seasonally adjusted increase was greeted with enthusiasm by industry experts, with some also pointing out the seasonally adjusted fall remains higher than August 2024 (by 2%) and 2023 (by 10%).
‘Housing transactions slowed over August but they are 10% higher than in 2023 as the recovery in transactions starts to plateau due to higher borrowing costs and broader economic uncertainty’, said Zoopla’s executive director Richard Donnell.
He added:
“Looking ahead, we expect transaction volumes to remain in line with current levels. Demand for homes at the upper end of the market is already being hit ahead of the budget as speculation grows over possible changes to the taxation of high value homes.”
Mark Tosetti, CEO of CAL, agreed that activity is likely to plateau – or worse – until the autumn budget settles speculation over changes to property taxes. He continued:
“The Zoopla House Price Index highlighted yesterday that demand for homes over £1m is down 11% and properties over £500,000 is down 8%, likely due to speculation about property taxes. While the wider market is steady, new listings for more expensive properties are also down. The closer we get to Reeves’ announcement, the more hesitancy we will see from buyers and sellers alike.
“Brokers and conveyancers must look to make swift progress now for serious buyers unperturbed by budget speculation, as many will still be looking to take advantage of recent mortgage rate cuts. But it will also be important to brace for momentum to pick up quickly once the budget dust settles.”
With the seasonal summer slowdown giving way to a traditionally busier autumn period, Anthony Codling, managing director of Equity Research, RBC Capital Markets, said the housing market climate is adjusting accordingly.
‘The UK housing market is neither hot nor cold, it seems to have found a level, a temperature it is comfortable with’, he said.
“It will be interesting to see how the speculation about what may or may not happen to property and other taxes in November’s budget impacts the housing market. We expect a slight cooling rather than a collapse, but time will tell.”
However, Andrew Lloyd, managing director at data insight company Search Acumen, said the subdued summer signals a market stalemate. He commented:
“August’s property transaction data reflects the usual seasonal snooze, but the 2% [adjusted] drop compared to last year points to a growing hesitation greater than holiday absences. The commercial property market is in summer slowdown, signalling stalemate as confidence remains on pause whilst markets await the Chancellor’s big moment come November.
“For lawyers, conveyancers and deal professionals, the challenge remains keeping transactions moving in a market clouded by hesitation and external hurdles. Administrative bottlenecks and paperwork delays continue to stretch timelines, with fall-throughs on the rise – especially in high-demand areas.”
For Simon Webb, managing director of capital markets and finance at LiveMore, the non-seasonally adjusted increase is encouraging and suggests buyer demand is translating into activity. He added:
“With the base rate cut in August, we expect this momentum to build, provided the market is given a period of stability in monetary policy. What happens in the budget and with interest rates in November will be key in sustaining confidence.”
Melanie Spencer, growth director at Target Group, joined the optimists. ‘The non-seasonally adjusted figures show another uplift in property transactions, which is a positive sign for the market – particularly given the wider economic picture at play’, she said.
“It speaks of the resilience we are seeing among homebuyers and movers, as well as an increasing willingness among sellers to not stand on ceremony and tweak prices to close the deal. Underpinning this is the hard work of lenders to improve access and affordability with enhanced mortgage rules at their disposal.”
However, she warned that the future remains uncertain and hangs on the outcome of the budget announcements. ‘This will undoubtedly factor into the plans and the urgency of many prospective buyers’, she pointed out. ‘Any potential lag or calming could shift quite rapidly – particularly if we do see headline-grabbing changes to stamp duty policy’.
Iain McKenzie, CEO of The Guild of Property Professionals, agreed that property tax speculation is prompting some buyers to delay decisions. However, he added, ‘demand remains underpinned by improved affordability, with the Bank of England base rate at 4%, its lowest in over two years after five cuts in the past 12 months’.
“Looking ahead, policy developments and persistent inflationary pressures could temper seasonal patterns, but greater supply and more competitive mortgage rates are supporting a steady outlook… With transaction volumes still trending above last year’s levels and affordability gradually improving, activity looks set to remain steady into year-end, even if some caution persists while buyers and sellers await clarity on tax policy.”
‘We now look to the budget in November and the next Bank of England decision on the base rate’, said Nathan Emerson, CEO at Propertymark.
“Both of these factors will play a big part in determining the level of confidence people have moving forward.”
HMRC’s report is at https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above/uk-monthly-property-transactions-commentary–2
