UK home sales rose strongly in July but this does not signal a change in direction in the housing market, analysts warned.
Residential transactions in July 2022 totalled 110,970, 32.9% higher than July last year and 7.2% higher than June 2022, according to data from the Office for National Statistics.
This was attributed to the end of the most generous period of the stamp duty holiday, as the ONS estimated that UK residential transactions in July 2022 are generally similar to historic levels observed in July before the pandemic.
Property sales (non-seasonally adjusted) are higher than pre-pandemic, and up 6% from July 2019, with the ONS terming it the busiest July since 2015.
As part of its monthly property sales statistics for July, HM Revenue and Customs (HMRC) published a list of completed transactions worth at least £40,000.
"House sales held up in July, thanks to the usual bumper summer season," said Sarah Coles, a personal finance analyst at Hargreaves Lansdown.
"However, this is a small detour for the market, rather than a change of direction. So as the summer fades, there’s every chance that the busy property market will do so too."
Stating that there is a tendency for the market to fluctuate, and sales tend to boom in the summer, the analyst said if one looks at overall trends, sales have been decreasing since January.
Some 111,000 people received keys to their new homes in July, just slightly below the peak in March 2022.
Though most of these sales will have been agreed in March and April, before the full impact of the cost-of-living crisis hit, Coles says the market drained of available property and buyers evaporated as summer drew near, and as sky-high energy costs, runaway inflation, rising rates sapped confidence from the market.
Since then, the number of properties for sale has fallen again, and buyers are fewer as well, with the RICS residential market survey also noting the number of new buyers has been declining since May.
"We do expect the market to keep trending downward as we head into the autumn."