The number of transactions worth more than £40,000 was 11% lower this June compared with June 2015, according to statistics released by HMRC.
In total there were 102,010 house purchases, down from 114,770 in June 2015. However there are signs the market is beginning to recover from the effects of the SDLT reforms which saw transaction levels jump in March, with the increase from May to June larger than the corresponding increase from May to June last year.
June saw a non-seasonally adjusted growth in transactions of 21.2%.
Doug Crawford, CEO of My Home Move said: “June’s figures show a market returning to health after a very quiet April and May, which was due to investors doing business earlier in the year to avoid the stamp duty changes. While the number of property transactions remain below the levels seen a year earlier, a 4.9% increase between May and June is very encouraging. My Home Move’s own data suggests that the number of completions in June 2016 was actually 2.7% higher than in June 2015.
“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.
“In the long term, strong fundamentals will continue to support a prosperous housing market. High levels of demand for both rental and owner-occupied accommodation will drive transaction figures upwards, and our recently published forecast predicts the number of property transactions will rise by 7% this year and by 20% by 2020.”
Andrew Bridges, Managing Director of Stirling Ackroyd, said: “Property transactions entered the summer with momentum – exactly what the property industry needs now. After stamp duty changes early in the year leading to buyers tightening their pockets, it’s great to see buying and selling approaching a new period of Brexit-related obstacles with a sense of vitality.
“Such optimism was dealt a blow by June’s surprise referendum result. So the next question is how the property market picks up again after an unexpected hurdle in the last five working days of June – a new era only just starting to be included in such official figures.
“Longer-term, property transactions face the dampening effect of a chronic supply shortfall. Particularly in the capital, demand for housing will always be strong. But authorities are not approving enough houses, and when they do homes are still not being built quick enough. The first half of 2016 has seen an uptick in the number of new homes approved in London – our upcoming New Homes Monitor reveals this in detail. But this alone will not be enough to bring real change and sustain momentum. A new approach is definitely needed that addresses supply. Property transactions will continue to be dependent on much sought-after new homes coming onto the market in sufficient volume.”