The number of homes sold in July in the United Kingdom was just 79,000 according to figures released today by the tax man. The monthly statement from HMRC confirms that whilst in July last year there were more than 89,000 transactions last month the number FELL by 13%
In July 2006 there were over 148,000 transactions as the market was heading towards a peak in values twelve months later. Over the course of 2006 more than 1.6m homes were sold but this figure halved last year to 880,000.
In both Scotland and Wales the volumes have halved from 13,000 and 6,000 respectively to 7000 and 3000. But it is in Ireland where the buyer’s strike has taken the firmest hold. The total number of homes sold has fallen from 4,000 in July 2006 to just a thousand last month!
The number of people putting their house on the market has also fallen but not by quite as much. It costs next to nothing to put your house on the market and since the abolition of Home Information Packs a year ago there has been a slight increase in these volumes.
The problem remains that there are few buyers who can actually transact. Whilst there are huge numbers of so-called ‘tyre kickers’ looking at web sites those who can qualify for a mortgage or who have the additional equity required are small in number. As a result, only one in three homes are selling.
In 2007 the average first time buyer saved 35% of his annual pay as a deposit for his house and he was able to borrowed 95%. Today he needs a whole years pay as he can only borrow 75%. With average house prices according to the Land Registry still 16% below their 2007 peak there are now a million people who have lost the equity in their homes, who even if they could take the physiological hit on the price they had hopes for no longer have the necessary equity to put down for the next property These people are blocking the homes for the current generation of first time buyers and are to all intents and purposes, prisoners in their own homes.