Property transactions defy Brexit uncertainty

Property transactions may have dipped over the past year, but house prices remain broadly unchanged.

Britain’s decision to leave the European Union may lead to short-term volatility in the housing market, but residential property prices in this country remain robust, as does the level of property transactions, as reflected by newly released data from HMRC which shows that there was a 4.9% increase in the volume of homes that changed hands in June compared with the previous month.

In total, 94,550 homes were snapped up June, and although this compares favourably with the 89,700 transactions recorded in May, it represents a significant fall from the 164,400 property deals recorded in March, and a 10.2% drop compared with June 2015.

But while the uncertainty around the EU referendum may have deterred some buyers, the reality is that the vote had minimal impact on the fluctuation in transactions compared to say the recent tax changes introduced by the government.

The surge in activity levels in March had more to do with the fact that buy-to-let investors were scrambling to purchase homes before the extra 3% stamp duty surcharge came into effect at the start of April.

Nevertheless, the hike in property transactions is good news for the market and actually if it was not for the severe shortage of properties on the market, may have actually been much higher.

A chronic shortage of homes will almost certainly continue to drive property prices upwards across many parts of Britain, even if prices fall in some other areas in the short-term, as is evident at the top-end of the market at the moment, particularly in London, where some vendors are now willing to accept offers significantly below asking price.

Ultimately, the lack of housing supply remains the core issue for the market.