The UK property market is experiencing mixed signals as annual property sales rise, but monthly activity is stagnating due to limited stock availability. According to recent data from HMRC, property transactions reached 91,820 in September, marking a 9% increase compared to the previous year. However, the month-to-month growth was just under 1%, with a slight drop in non-seasonally adjusted transactions compared to August.

Current Market Dynamics

Nick Leeming, chairman of Jackson-Stops, pointed out that while there was an immediate boost in the housing market following the recent election, fueled by falling interest rates and positive wage growth, the lack of available properties is hindering further growth. The anticipated changes from the recent Budget did not include much-needed Stamp Duty reforms, which many market commentators had expected. Jackson-Stops’ research indicated that a significant portion of the public supports changes to Stamp Duty, with one in four people in favor of reform.

Leeming emphasized that despite the Budget’s theatrics, the property market remains largely unchanged, with stagnant transaction levels month-on-month. He expressed hope that falling inflation and improved borrowing conditions would eventually enhance buyer confidence.

Positive Buyer Sentiment

Matt Thompson, head of sales at Chestertons, noted that the introduction of sub-4% mortgage products and lower interest rates has spurred buyer interest, prompting sellers to list their properties sooner. Currently, there are 17% more properties under offer compared to 2020, indicating ongoing buyer activity despite the challenges posed by limited inventory.

Nathan Emerson, chief executive of Propertymark, described the market as looking positive overall. However, he highlighted concerns regarding the Budget’s impact on first-time buyers, particularly with the Stamp Duty threshold set to drop to £300,000 from next April. This change could result in an additional tax liability of £6,250 for those looking to purchase homes priced at around £425,000, creating further barriers for new entrants to the market.

Conclusion

In summary, while annual property sales in the UK are showing growth, monthly stagnation reflects the ongoing challenges of low stock availability. The recent Budget, which failed to introduce significant reforms to Stamp Duty, has drawn criticism from industry experts who believe such changes could stimulate market activity. As buyers navigate fluctuating interest rates and changing policies, the outlook remains cautiously optimistic, with expectations of continued interest in the coming weeks, especially if the Bank of England announces further rate cuts.