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Sales of homes rose in July despite economic headwinds

Christina Hoghton
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Christina Hoghton

The housing market remains robust, but could the cost of living crisis start to impact sales as we come to the end of summer?

There were 104,470 UK residential transactions in July 2022, according to the latest figures from HM Revenue & Customs.

This is 3.2% higher than in June and a significant 36.7% higher than a year ago in July 2021.

Iain McKenzie, CEO of The Guild of Property Professionals, said: “The level of activity in the market portrays a picture of strong demand that continues in spite of elevated house price growth.

“A rush to complete in the face of climbing borrowing costs will be partly responsible for this. Buyers can sense that interest rates are only moving in one direction and the landscape for mortgage applicants could look much tighter in 12 months’ time.”

Andy Sommerville, director at Search Acumen, added: “Although the heat of the post-pandemic property rush has burnt out, we are left with a strong residual market as families grow, downsizers relocate, and employment remains buoyant. This formula has ensured the wheels of the market have kept turning at a steady pace throughout July.”

Market slowdown

Despite the robust figures, some commentators suggested that the cost of living crisis will soon start to impact the housing market.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, explained: “As the summer fades, there’s every chance that the busy property market will do so too. The market tends to fluctuate, and boom in summer, but if you look at overall trends, sales have been gradually falling since the start of the year.

“July saw almost 111,000 people get the keys to their new home, with sales only slightly below the 2022 peak in March. This is particularly impressive given that homes for sale have been so thin on the ground.

“However, an awful lot of these sales will have been agreed in March and April, before we were hit by the full impact of the cost-of-living crisis. By the time we reached the summer, the market drained of available property and buyers evaporated, as sky-high energy costs, runaway inflation, rising rates and concerns that worse could be on the way sapped confidence from the market.”