31 July 2024
If you are covering the latest UK monthly property transaction data, please see the following comment from Holly Tomlinson, financial planner at Quilter:
“According to the latest monthly property transactions data from HMRC, property purchases were marginally lower in June, decreasing to 91,370 on a seasonally adjusted basis, less than 1% lower than May 2024, though still 8% higher than in June 2023.
“Though the number of property transactions completed is higher than last year, which is indicative of an uptick in buyer confidence compared to the lows following the mini budget, we are still yet to see property transactions reach pre-pandemic levels. This is unsurprising given the considerable economic uncertainty of recent years, and with interest rates still at a high, we are unlikely to see the housing market make any great progress in the second half of the year.
“That said, rumours of the new Labour government aligning capital gains tax rates to income tax rates might spur abnormal activity in the property market. This shift could trigger a surge in property sales as homeowners rush to offload their second properties before the new legislation takes effect. Such a move would temporarily boost housing market activity, prompting many to reconsider their property portfolios and potentially shift investments to assets with more favourable tax treatments, such as private pensions.
“The property market typically thrives throughout the spring and early summer months, but high and volatile mortgage rates coupled with the prevailing view that an interest rate cut is off the cards until the autumn has put many buyers off.
“The Bank of England monetary policy committee meeting tomorrow may offer some hope to eager buyers should policymakers indicate a clearer path ahead for rate cuts, but given inflationary pressures are expected to persist, the Bank will therefore be reluctant to move too fast so any future rate cuts will be gradual.
“The latest Bank of England money and credit statistics released on Monday further reiterate that the likelihood of seeing a spike in property purchases is slim, as net mortgage approvals for house purchases remained the same in May and June, sitting at 60,000.
“Looking ahead, it is clear something must be done to help alleviate affordability pressures and reignite the property market. Labour’s housing plans published yesterday appear to be a step in the right direction, but it would take a significant amount of time before we see these plans have any real effect on the housing market. Nonetheless, it is vital that the government follows through on its commitments in order to help combat the current dearth of supply.”
