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UK home sales halve in October as market put on ice

UK house prices
UK housing market is showing sign of cooling, according to Office for National Statistics figures. Photo: PA

New data from HMRC has shown that month-on-month, home sales in the UK more than halved in October, with 76,930 residential transactions taking place.

The 52% dip reflects a cooling housing market, following months of high turnover as stamp duty was wavered to support the market during COVID-19 lockdowns. Overall, the market saw the slowest October since 2012.

Analysts felt the figures were unsurprising.

"We always see drops like this after the end of a tax break, and we tend to see buyers hunker down for winter, so the combination of the two was always going to mean a quieter few months," said Sarah Coles, personal finance analyst, Hargreaves Lansdown.

Watch: How much money do I need to buy a house?

"A major chunk of sales we would otherwise have expected this winter, were rushed through in time for the deadline at the end of September."

The drop from the previous October was also impressively steep, but this was from an unusually busy October in 2020.

A combination of the market closing the previous spring, and the stamp duty holiday lighting a fire under buyers, meant sales ramped up throughout last winter.

Other analysts noted the fundamental change in what people are now looking for in a property as the world opens up again.

The shift to places with more outdoor space and facilities to work from home, coupled with fewer international buyers has hit transactions in built up areas, said Karen Noye, mortgage expert at Quilter. This could have an impact on prices.

Read more: Most viewed UK homes in October

"The latest ONS UK house price index showed a record high average UK house price of £270,000 in September, £28,000 higher than the same time last year.

"While prices still seem to be on the up, the huge drop in property transactions may well begin to nudge overinflated house prices back down over the coming months."

Alongside other factors, recent reports suggest that housing supply has slowed, with fewer properties coming to market than the red hot summer period.

The slowing market didn't stop house prices rising again in October. According to Rightmove the average UK house rose in price by £5,983 ($8,027), jumping by 1.8%.

This was the highest percentage monthly rise at this time of year since October 2015 and the first time since March 2007 that Rightmove has recorded a "full house", with all market sectors and all regions of Britain having hit new record price highs in the same month.

Watch: Should I move in with my parents to save money?