Property sales (not seasonally adjusted) plummeted to 85,090 in October – down 48.4% from September, and down 30.1% from a year earlier, HMRC figures have revealed.
This marks the slowest October since 2012.
Sales over the 2021/22 tax year so far are higher than any other year for the past decade (868,040).
Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “Property sales plummeted in October, but there’s nothing to frighten the horses in these figures. We always see drops like this after the end of a tax break, and we tend to see buyers hunker down for winter, so the combination of the two was always going to mean a quieter few months.
“The monthly drop looks spectacular, as sales almost halved, but this was from an enormous peak, created by the final stamp duty holiday deadline. A major chunk of sales we would otherwise have expected this winter, were rushed through in time for the deadline at the end of September.
“The drop from the previous October was also impressively steep, but this was from an unusually busy October in 2020. A combination of the market closing the previous spring, and the stamp duty holiday lighting a fire under buyers, meant sales ramped up throughout last winter,
“We knew this fall was coming, and we’re not expecting it to pick up again in the immediate future. Usually after a spike like this, we get a quieter period. Add in the fact that we usually get sales tailing off at this end of the year, and it’s fair to expect a degree of hibernation.
“This will be exacerbated by the fact that the number of properties coming to the market has fallen for seven months in a row, and the average agent has just 37 properties on its books, so even if people are keen to buy, there’s hardly anything on the market
“However, we’re not expecting the market to remain dormant for long. People are still reassessing how and where they want to live in the wake of the pandemic, which is keeping them on the move. And while mortgage rates have crept up slightly, there are still some phenomenally cheap deals around, which is enough to support activity in the market.
“Assuming we don’t get any big interest rate shocks between now and then, we can expect the market to be bright eyed and bushy tailed again by the spring.”
Paul Stockwell, Chief Commercial Officer at Gatehouse Bank, added: “Property transactions have halved in a month, coinciding with the removal of the final stamp duty discount, and this will undoubtedly mark the resumption of lower sales volumes moving forward.
“Transactions plummeted similarly after June’s stamp duty deadline, so it’s not surprising to see them fall in this way again.
“With the tax incentive now completely removed, we’ll see the back of these peaks and troughs as transactions settle into a more consistent pattern.
“This fall in sales signals that there is unlikely to be any long-term dividend for transactions as a result of the stamp duty holiday. House sales will likely return to the historic norms seen before the pandemic as the cost of moving becomes a factor again.”
Adam Forshaw, managing director at national conveyancing firm ONP, concluded: “The number of housing transactions has practically halved in October compared to September, which is a direct result of the end of the stamp duty holiday.
“This is back to levels seen before the pandemic started and could be described as a return to normality after the frenzy that the stamp duty holiday unleashed on the housing market.
“However, the conveyancing part of the industry remains extremely busy and firms are still working through the largest pipelines we have ever seen. This is likely to remain the case until the end of the year, and with the supply of housing stock dropping we hope to return to more manageable business volumes.”
