Zoopla Property : Property sales fall to pre-referendum level

What's the latest?

The number of homes changing hands has slumped to its lowest level since the run up to the EU referendum.

Only 93,130 properties worth more than £40,000 were sold in September, down from 97,330 in August, according to HM Revenue & Customs.

Sale volumes last month were at their lowest since May this year, when the property market was hit by uncertainty ahead of the Brexit vote.

And they were also around half the level seen in March when more than 179,000 homes changed hands, as buy-to-let investors rushed to complete dealsahead of April's Stamp Duty hike.

Why is this happening?

Some of the fall is likely to be due to the traditional seasonal lull caused by people putting moving plans on hold in August while they go on holiday.

The HMRC figures measure sales right at the end of the buying process, meaning many of those recorded in September will have been agreed in August.

But the data may also be reflecting the beginning of a slowdown in the property market.

While housing market sentiment has held up well in the face of the uncertainty caused by the Brexit vote, commentators have predicted a slowdown in transaction volumes during the second half of the year.

Above: three-bedroom maisonette for sale on Vernon Street, London.

Who does it affect?

The housing market is currently in a bit of a 'chicken and egg' situation.

On the one hand, the slowdown in transactions could be good news for potential buyers, as it may put them in a better bargaining position.

But on the other hand, the fall in sales may well be caused by the ongoing shortage of properties on the market, meaning more buyers will be chasing fewer homes, leading to greater competition and forcing prices higher.

Sounds interesting. What's the background?

Data on the housing market since the referendum has been fairly positive.

While buyers showed some jitters in the immediate aftermath of the vote, Royal Institution of Chartered Surveyors (RICS) suggested they were returning to the market by September.

Meanwhile, the Bank of England's August interest rate cutand new lending scheme has kept mortgage rates highly competitive.

But the number of homes for sale remains close to record lows, continuing to put upward pressure on prices.

And despite low borrowing costs, commentators have warned that affordability is beginning to look stretched.

The current market dynamics have led many to predict that while house prices are likely to hold firm in the months ahead, transaction volumes look set to fall.

Top 3 takeaways

• The number of homes changing hands has slumped to its lowest level since the run up to the EU referendum.

• Only 93,130 properties worth more than £40,000 were sold in September, down from 97,330 in August.

• Volumes were around half the level seen in March when more than 179,000 homes changed hands, as buy-to-let investors rushed to complete deals ahead of April's Stamp Duty hike.

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