HMRC: House sales weak in August

| September 23, 2011 | 0 Comments

HM Revenue & Customs (HMRC) has today revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

However, August is traditionally regarded as a quieter month due to the holiday season.

At the height of the housing boom in July 2007, 151,000 homes were sold.

Today’s figures, along with other recent reports, suggest the housing market will remain depressed throughout 2011 due to economic uncertainty and ongoing mortgage restrictions.

Earlier this week, the Council of Mortgage Lenders (CML), which represents lenders who offer around 94% of all residential mortgage lending in the UK, reported UK mortgage lending grew in August.

According to the Council, lending was 6% higher in August on a monthly basis. However, approvals are running at around half the level seen prior to the financial crisis.

However, despite the encouraging figures, the CML said activity is subdued but broadly stable.

Howard Archer, chief UK economist at IHS Global insight, cautioned that although activity within the housing market had improved of late, it is still low compared to “long-term norms”.

For that reason, he believes house prices are likely to fall by around 5% overall from current levels by mid-2012.

He adds that consumer confidence is low due to uncertainty surrounding the economy and therefore buyers are adopting a wait and see approach.

In related news last week, the Royal Institution of Chartered Surveyors (Rics) reported that the UK housing market remained weak in August with house prices falling further.

The Rics report said 23% of surveyors reported house prices fell rather than rose – this reading has been in negative territory for more than a year.

Meanwhile, surveyors remain negative about the direction of future house prices with 23% more surveyors expecting prices to fall rather than gain over the next quarter.

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