Saturday, July 30, 2022

Property Transactions Down 55% - UK Property Talk

Property transactions down 55% on 2021, according to official figures.

House prices may be rising but sales are slowing at an alarming rate.

Recent HMRC property transactions data for June shows there were 96,920 sales, on a non-seasonally adjusted basis, the third slowest June for a decade and down 4% on June 2019.

Sales are down 55% compared with 2021, which was the busy stamp duty holiday rush period.

On a monthly basis, sales are down 3.1%, according to the HMRC data.

The seasonally adjusted estimate of UK residential transactions in June 2022 was 95,420 sales - 54.3% lower than June 2021 and 7.9% lower than May 2022.

The figures are based on stamp duty submissions.

HMRC Headline Figures

The latest transactions data:

·        the provisional non-seasonally adjusted estimate of UK residential transactions in June 2022 is 96,290, 55.1% lower than June 2021 and 3.1% lower than May 2022

·        the provisional non-seasonally adjusted estimate of UK non-residential transactions in June 2022 is 8,850, 24.3% lower than June 2021 and 9.5% lower than May 2022

·        the provisional seasonally adjusted estimate of UK residential transactions in June 2022 is 95,420, 54.3% lower than June 2021 and 7.9% lower than May 2022

·        the provisional seasonally adjusted estimate of UK non-residential transactions in June 2022 is 9,110, 21.9% lower than June 2021 and 11.6% lower than May 2022

High Street UK banks, like Natwest, have failed to pass on several Bank of England base lending rate rises to millions of savers. Base rates have been steadily rising from a low of 0.10% in October 2021, which banks have not passed on to savers.

At the same time, they are INCREASING interest rate for borrowers who owe money on their already expensive credit cards, and mortgage rates have risen by up to 300% from around 1% to over 3%.

NatWest increased rates on its credit cards by 2.5% as credit card borrowing in June grew at the fastest rate in nearly 17 years, Bank of England figures reveal. Borrowing on plastic soared at an annual rate of 12.5% - the fastest pace since November 2005.

Mortgage rates have also jumped in the last year adding significantly to the cost of buying a home. For instance, a 2% increase on a £200,000 mortgage will cost borrowers an additional £4000 per annum or £333pm. On a £250,000 loan, the extra cost is £5000 a year or £416pm.

Most lenders will take this additional burden into account when working out the affordability test and adjust the borrowing level downwards. In other words, the borrow must put down a higher deposit or pay less for a property.

The current UK base lending rate is 1.25%.

Is your bank branch closing down?

US Economy shrinks as Fed hikes rates by 0.75%

The US economy contracted 0.9% for the second quarter in a row, technically though not officially considered an economic recession.

The US central bank has announced another large interest rate hike as it fights to control soaring prices in the world's largest economy.

The Federal Reserve said it would increase its key rate by 0.75 percentage points, targeting a range of 2.25% to 2.5%. Meanwhile, banks are leaving millions of savers out of pocket in accounts paying almost ZERO interest – which means their savings are LOSING 9.4% (the official UK inflation rate) every year.

Savers should vote with their feet and move their money to obtain better deals – if they can find a local branch!

Years of artificially low interest rates have pushed millions of investors into buy-to-let property, where the can receive much higher income, as well as growth on their capital.

Open House South Herts is advertising property deals in the north of the UK from just £30,000 asking price with yields of between 10 and 15%. – see https://www.facebook.com/estateagentswatfordelstreeandborehamwood

A slowdown in the property market means more opportunities for buyers and investor!

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