Pryor on property: Expert opinion

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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.