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79% fewer homes sold in July...
Initial sales figures have been released by HM Land Registry for the month of July. Each month they produce the headline statistics based upon completed sales submitted by house buyers' lawyers.
In their most recent official report they confirmed that the volume of sales in May was down 43% on the same month last year. Two days later and they have released the initial records of each sale recorded in July which gives an indication of just how many properties were sold in that month.
In July 2006 there were 115,000 homes sold in England and Wales.
In July 2007 there were 101,000 properties sold. A drop of 12%.
So far just 21,749 sales have been recorded in July this year. A fall at present of 79%.
Whilst there is obvious distress for many over the reported fall in house prices the staggering drop in transaction numbers is actually of greater concern.
With so few sales taking place the impact on the wider market becomes magnified. It becomes harder and harder for agents and valuers to provide accurate valuations and nearly impossible for buyers to know how much to bid.
In some postcodes there have now been no recorded sales for two successive months.
Fewer sales means less Stamp Duty revenue.
Fewer sales will mean less income for estate agents, many of whom are already finding it impossible to keep trading. The impact on Stamp duty revenue will also be significant making it even harder for the Government to come up with credible help for the housing market.
In 2007 there were 998,000 homes sold in England and Wales. As of the end of July there were just 366,290. I expect the Exchequer to lose as much as £3 Billion this year as a result of the reduction in Stamp Duty receipts from house purchases.
According to The Bank of England the number of new mortgages approved for home buyers fell by 71% in July so we should expect completions in August and September to fall yet further. It is clear that we are still plumbing the depths of this housing recession and house prices themselves look to have much further to fall.
Govt Stamp Duty announcement
It is difficult to see how any of the announcements made today by the Government will amount to anything more than re-arranging the patio chairs as the bailiffs knock down the front door.
Whilst it is good to have clarity on the issue of their self-inflicted stamp duty cock-up, which has caused considerable uncertainty, few people would have benefited in July from the Stamp Duty holiday that has been announced.
There were just 5099 properties so far recorded between £125,000 and £174,999 which between them would have raised just over £756,000 for the Treasury. House buyers who last year could expect to borrow 95%+ are now typically having to find a further 10% as lenders pull products and high loan-to-value mortgages.
I'm afraid that a 1% Payment Holiday' will not touch the sides!
So where were houses selling?
The top 10 places with the most sales recorded so far in July were:
July '08 to July '07 - Lowest percentage fall by postcode
BN1 51 - 186, 73% (Part of Brighton)
BN2 50 - 208, 76% (Part of Brighton)
SW19 47 - 167, 72% (Wimbledon)
CR0 46 - 278, 83% (Part of Croydon)
BA2 40 - 147, 73% (Part of Bath)
LE2 39 - 168, 77% (Part of Leicester)
CF14 37 - 148, 75%(Part of Cardiff)
CO15 37 - 130, 72%(Part of Clacton-on-Sea)
BS16 36 - 171, 79% (Part of Bristol)
Share your thoughts
Do you disagree? Or agree? Let us know what you think and help shape future articles by emailing PryorOnProperty@mac.com
If you have kids don't you want to leave some nest egg to them or have value in your home that could be used as collateral to help them get into the market. Doubt there are many parents who don't want to help secure their kids futures in such a way.
House values are very important. If not wouldn't we all be happy living in the equivalent of the cardbox box under the motorway bridge or permanently renting.
This mght be tough on those approaching negative equity. But if they can still afford the mortgage payments then that's fine - they got what they paid for afterall.
Re your article on tiscali
Sense spoken at last - the real issue is to increase the ease and availability of mortgages and get the market moving.
I'm not a skilled commentator and see this but ask:
Why when the banks are the main source of the international financial crisis through dodgy sub prime dealings (aka greed), have governments not acted to smack them into touch ?
Why do Darling/Brown not seem to understand (indeed have a clue) abou the real issues on property sales and stamp duty. They are simply not of this planet.
Why are the stream of desperately unhelpful negative comments such as yesterday's by the Head of Nationwide based on 'finger in the wind predictions' on falls in house prices, not challenged.
If I predicted a 25% fall in Bentley or Mercedes prices, I'd be laughed at as a fool so why give credence to such comments on housing ?
Especially when the comments are from very interested parties in the property market with much to gain from falling prices.
Am I being dense or do falling prices increase assets for the Nationwide et al if such predictions come to pass.
It's not their share of the property value that falls or is diminished - the mortgage remains the same, so for example, the Nationwides's percentage ownership of the property increases and if the house is repossesed they retain all value.
If they acted as responsible lenders in the first place when granting mortgages, they are protected and if they haven't from the examples in America with Fannie Mae & Freddy Mac and with Northern Rock in the UK, the Government bales them out with tax payers money.
Or, in the case of Cheshire and Derbyshire, Nationwide buys them for a bargain (increasing it's customer base, general business opportunity and domination of the market).
So the merry go round continues but is anyone asking what is being done either in the UK or internationally to control banks to ensure such as crisis is not repeated. Banks and Buildings society's have a free rein and despite the chaos that's been created, no Government has either the brain or balls to control them.
No matter how the man in the street is affected, no bank will really suffer, immaterial of how much their greed and risk taking imcompetance contributed to the crisis.
Now we see them shut the door after the horse has bolted worsening the crisis and are simply allowed to.
Is there any other business or organisation where this would be allowed ?
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