Once again I have the latest data from the Land Registry, this time it’s the actual sales in September. This is the most up to date snap-shot of the the housing market – a record of actual completions just a month ago – not the regular Land Registry report of sales agreed six or more months ago.
September was the first month of home sales following the Chancellor’s change to the Stamp Duty threshold. This was also the month that the wheels came off the banking world with Bradford & Bingley, AIG, Lehman Brothers and HBoS just the tip of the financial iceberg.
So far just 15,601 sales have been recorded in England and Wales down from 101k in September last year and from 115k in September 2006. I expect the total for the month to end up at 51,000.
We expect the current figure of 15,000 to grow as conveyancers get round to filing their returns. This paltry number suggests that the September total will still be significantly lower than last year – by as much as 50%! The housing market is officially on a respirator and the prognosis isn’t good.
HMRC confirm the bad news.
Comparable figures from HM Revenue & Customs produced once a quarter – the latest just last week, confirmed that they recorded just 59,000 sales in the whole of the UK during September. We can therefore be very confident about the real condition of the patient. The Chancellors dithering over whether he could announce the changes to Stamp Duty or not removed any hope there may have been that this alone would be enough to improve things. The succession of financial dominos that then fell starting with Lehmans and ending £34billion later with HBoS and LloydsTSB snuffed out the remaining flicker of life that remained.
Forget what the figures from Halifax and Nationwide are saying. Like the official Land Registry figures released last week for July, these are all out of date. This market is falling faster than a whore’s drawers with many homes now worth over 20% less than they were at the peak of the market. We can expect values for many homes to fall further, perhaps to 2002 levels meaning that for some they will have fallen by 50%. 5.7 million people have bought since then and those who borrowed more than 90% will be in negative equity.
Interest rates to be reduced this week.
Falling interest rates later this week will help those on tracker mortgages maintain their repayments but for others, those on Standard Variable products or worse, those facing remortgaging, the future is bleak. For them the LiBOR rate is more significant than whatever the Bank decide next Thursday and whilst it is at last falling the Bank of England doesn’t control the interbank rate. Banks may be more comfortable about lending to each other at last but all are now hoarding cash, rebuilding their tattered reserves and there is still no appreciable increase in mortgage lending let alone a return to the 2007 volumes that were supposedly promised when the Prime Minister dished out £34 billion of our money.