Dip in property sales

The number of property transactions carried out across the UK dropped by 2.9% in July compared to June.

According to Agency Express, the UK’s largest supplier of ‘For Sale’ boards, this second monthly decrease in property sales is a result of pending Government spending cuts.

It believes the announcement of a two-year pay freeze in the public sector and the VAT increase to 20% slated for early next year have led people to revise their budgets and put moving plans on hold for now.

The Agency Express Index records that the number of houses sold in July was the lowest level since January and compared to July 2009, monthly house sales were down 3.9%.

However, they were up 26.0% on July 2008.

Stephen Watson, Managing Director, Agency Express, said:

“It is evident that we are entering a period of austerity as the Government looks to cut back on its spending. Anyone working in the public sector will see a drop in their real income as they won’t get a pay rise until 2012, at the earliest.

“In addition, the rise in VAT next year and the pressure on some companies for it to reduce the hours for its workers will hit people’s household budgets. It seems that people who have been looking to move have paused to take stock of the situation and to recalculate their budgets.

“However, with the likelihood of interest rates staying low for sometime and the number of properties coming to market still looking healthy, it should mean house prices and affordability will remain stable, so it’s still a good time to move.”

Only four regions in the UK saw an uplift in the number of houses sold in July. The West Midlands had the biggest increase up 17.4%, followed by the South West up 11.4%, Scotland up 3.4% and London up 0.8%.