Homes sold falls below 100,000 for November, as London homes continue to plummet in value
The number of homes sold on a monthly basis fell below 100,000 in November ñ the first time this has happened in 2014, as demand continues to diminish towards the back part of this year.
According to Her Majestyís Revenue & Customs (HMRC), 98,490 property deeds exchanged hands last month, representing the lowest number in a year, and roughly 2000 less than Octoberís completed transactions.
Although the winter months are traditionally somewhat barren as far as house sales are concerned, the data does suggest that a number of cooling measures deployed earlier this year are continuing to affect the housing market.
This viewpoint is given further weight by data from the British Bankerís Association (BBA), which shows that mortgage approvals continued to tumble in November hitting their lowest point in a year and a half. The number of mortgages approved fell by around 400 to 36,717 in November, representing a 20% drop on the previous year.
"Today's figures show quite a sharp chill to the housing market in recent months -- with house purchase approvals during November 20% lower than a year before," said Richard Woolhouse, BBA chief economist".
"It will be interesting to see what impact the stamp duty changes the Chancellor unveiled in his Autumn Statement will have early in the New Year. They could prove a modest stocking filler for homebuyers and estate agents".
"It's also striking to see that unsecured borrowing such as personal loans are growing at their fastest rate for six years. This suggests consumers may be feeling more confident which bodes well for a fruitful Christmas for retailers."
November has already seen record numbers of shoppers flocking to the high street to take advantage of the numerous bargains on offer, but estate agents will be hoping Christmas comes late, as youth-orientated stamp duty reforms begin to encourage buyers seeking a fresh start and a fresh home in the New Year.
The London Effect
George Osborne has affirmed that houses worth under £125,000 would no longer be subjected to stamp duty, potentially sparking a property boom in areas in the North and generally a fair distance from London, where houses continue to plummet in value leading experts to forewarn the public as to the debilitating effect the Capital will have on house price growth in the coming times.
The Centre of Economics and Business Research believe property price growth will be negative throughout 2015, with a spokesman stating: ìThe decline in prices will be led by London. Prices in the capital are expected to fall by 2.6% in 2015 as domestic and overseas demand fall back.î
According to research from Haart, house prices in London fell below £500,000 on average, with the wealthier postcodes also feeling the effects as growth fell by 1.9% across the board in London compared with 0.6% growth across the country as a whole.
Despite this, falling inflation and a pickup in real wages has come at a timely junction, where the housing market is expected to swing in the early stages of 2015, as lenders fully acclimatise to new lending criteria and consumers seek a sweeter deal thanks to the eradication of stamp duty.
Haart noted a 15% increase in the number of buyer inquiries made in the wake of Osborneís announcement on the reforms to be made to stamp duty.
Chief executive, Paul Smith, said: ìAs we head into 2015, 98% of buyers are set to make a stamp duty saving. The effect was immediate as we saw a 15% increase in inquires the day after the announcement as buyers who were previously reluctant to take a step on to or move up the property ladder suddenly had the door opened.î
ìWe are optimistic for 2015 and while we may not see the market reach the giddy heights of the first half of this year, which is no bad thing, we predict that property price growth will remain strong and confidence will continue to ride a high as we approach the next election.î
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