The number of residential property sales in October slumped by 52% to 76,930, compared to September’s figure of 160,950 as the rush of buyers trying to beat the end of the stamp duty holiday subsided, data from HM Revenue & Customs show.
October’s provisional estimate, on a seasonally-adjusted basis, was also 28.2% lower than the same month in 2020.
North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “Although these numbers are inevitably a little dated as they reflect buying decisions being made several months ago, transactions are always a better indicator of market strength than more volatile house prices.
“They demonstrate clearly the determination of buyers to move, as well as the impact of the stamp duty holiday, and explain why the numbers have reduced so significantly.
“Looking forward, we are still seeing on the ground plenty of demand and enthusiasm to take advantage of low interest rates while they last but there is some softening in prices, even though the stock shortage remains.”
SPF Private Clients chief executive Mark Harris says: “After a stonking September where buyers rushed to complete on their property purchases in order to take advantage of the last vestiges of the stamp duty holiday, October was bound to see a drop-off in transactions.
“The markets continue to price in an interest rate rise in December although the Bank of England is hinting that the situation is ‘finely balanced’ with slowing growth and the energy supply squeeze, which won’t be helped by a rate rise.
“In the meantime, the dynamic nature of mortgage pricing has paused a little as lenders take stock.
“Not all mortgages are becoming more expensive – generally, rates on lower loan-to-value mortgages have been rising but on higher LTVs they have been falling.
“A 95 per cent LTV two-year fix is cheaper now than it was two years ago, making life easier for first-time buyers, who are so important to the overall health of the housing market.”
Chestertons chief executive Guy Gittins says HMRC’s figures do not reflect the agency’s own experience.
Its branches saw a 22% increase in the number of offers being made in October and a 26% uplift in agreed sales compared to September.
Supply remains under pressure with 18% fewer properties available for sale in October compared to the previous month.
There was a 5% month-on-month decrease in the number of sellers reducing their asking, while year on year this was down by 39%.
Gittins says “At the end of October, our new buyer enquiries were up 18% compared to this time last year when we already had the added urgency and incentive of the stamp duty holiday.
“We have seen demand being driven by buyers who didn’t manage to agree a deal within that timeframe and those who put their search on hold during the summer break.
“As buyer demand remains unsatisfied, properties are going under offer increasingly faster making for an extremely competitive market.”
