UK Housing Market Slump Deepens
The UK housing market has been in a slump since the start of the coronavirus pandemic, and the situation is only getting worse. According to the latest figures from the UK’s Land Registry, the number of homes sold in August was the lowest since the lockdown began in March.
Lowest Number of Homes Sold Since Lockdown
The Land Registry reported that only 57,890 homes were sold in August, a drop of more than 20% from the same period last year. This is the lowest number of homes sold since the lockdown began in March. The figures also show that the number of homes sold in the first eight months of the year is down by more than a third compared to the same period last year.
Stamp Duty Holiday Impact
The slump in the housing market is being attributed to the uncertainty caused by the coronavirus pandemic, as well as the end of the stamp duty holiday in March. The stamp duty holiday, which was introduced in July 2020, had been credited with boosting the housing market by reducing the cost of buying a home.
Regional Variations
The slump in the housing market is not uniform across the country. In London, the number of homes sold in August was down by more than 40% compared to the same period last year. In contrast, the number of homes sold in the North West was down by just 10%.
Rising Prices
Despite the slump in the number of homes sold, the average price of a home in the UK is still rising. The Land Registry reported that the average price of a home in August was £245,000, up by 4.2% compared to the same period last year.
Mortgage Approvals
The slump in the housing market is also reflected in the number of mortgage approvals. The Bank of England reported that the number of mortgage approvals in August was the lowest since the start of the pandemic. The number of approvals was down by more than a third compared to the same period last year.
Outlook for the Housing Market
The outlook for the UK housing market remains uncertain. The government has introduced a number of measures to support the market, including the extension of the stamp duty holiday until the end of June. However, it is unclear how effective these measures will be in boosting the market.
Rising Unemployment
The outlook for the housing market is also being affected by the rising unemployment rate. The Office for National Statistics reported that the unemployment rate in the UK rose to 4.5% in August, the highest rate since 2016. This is likely to have a negative impact on the housing market, as fewer people will be able to afford to buy a home.
Impact on the Economy
The slump in the housing market is having a negative impact on the UK economy. The Land Registry reported that the total value of homes sold in August was £14.3 billion, down by more than a third compared to the same period last year. This is likely to have a knock-on effect on the wider economy, as the housing market is a major driver of economic growth.
Conclusion
The UK housing market is in a slump, with the number of homes sold in August the lowest since the start of the pandemic. The slump is being attributed to the uncertainty caused by the coronavirus pandemic, as well as the end of the stamp duty holiday in March. The outlook for the housing market remains uncertain, as the rising unemployment rate is likely to have a negative impact on the market. The slump in the housing market is also having a negative impact on the wider economy, as the total value of homes sold in August was down by more than a third compared to the same period last year.