The number of houses sold last year fell by 1%, according to research carried out by HM Revenue & Customs (HMRC).
House Sales have Declined
HMRC’s calculations revealed that 869,000 properties were sold in 2011. This was 11,000 less than the previous year. It is also one of the lowest figures on record since modern recordings began in 1978. In 2006, about 1,669,000 homes were bought and sold.
This decrease is due to strict mortgage lending, declining incomes, and rising unemployment, say analysts. Many first time buyers are also struggling to get onto the property ladder due to high deposit requirements.
Geoff Meen, Professor of Economics at the University of Reading, explains: “If you have very poor levels of credit availability, for first time buyers and people moving home, you are going to get low levels of sales taking place.
“You would expect low levels of transactions taking place in any recession as well. Given we have very low levels of new construction activity, new transactions reflect sales of new dwellings, so if you have got low starts and completions, you are going to get low transactions as well.”1
The Building Society Association’s Adrian Coles also comments: “This is not just a cyclical downturn where we will see a recovery in a year or two; there are some fundamental changes that have occurred.”1
Additionally, the Council of Mortgage Lenders (CML) expect that mortgage lending could drop behind this year. Furthermore, the Bank of England predict that mortgage lenders with also tighten lending criteria, which will naturally make it harder to get a mortgage.