Belfast Telegraph

Home sales data shows UK market activity is faltering

The number of homes changing hands in the UK fell during August in a further indication that activity in the housing market is faltering, Government figures showed.

Around 85,000 properties worth more than £40,000 were sold during the month, down from 90,000 in July, according to HM Revenue & Customs.

The figures highlight the current subdued state of the housing market, as although they were up on the 79,000 transactions that took place in August last year, the level was less than half the 162,000 homes that were sold in August 2007, before the credit crunch impacted on the market.

The data comes after the Council of Mortgage Lenders said lending last month had fallen to its lowest level for August for a decade.

There is traditionally a dip in lending between July and August, but the latest drop was more pronounced than in previous years.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), said: "The HMRC data continues to demonstrate the subdued level of activity in the residential property sector.

"Despite ongoing concerns about the prospects for the economy, the latest RICS Housing Market Survey showed sales expectations are improving.

"However, with mortgage finance still in short supply and little evidence of a meaningful shift in behaviour from lenders, it is hard to see this slightly more optimistic mood being translated into significant higher sales volumes."

The figures add to a run of gloomy data on the housing market, with Nationwide reporting price falls of 0.9% during August.

And the latest housing market survey by RICS in Northern Ireland showed prices have been dropping for three years.

Many potential buyers have adopted a "wait and see approach" due to concerns about the state of the economy, job security and the impact of future tax rises.

This, combined with an increase in the number of homes coming on to the market, has helped to relieve the previous mis-match between supply and demand, which was one of the main factors that pushed up house prices during 2009. But the drop in activity has sparked fears of a double dip in the market.