Wednesday, 21 May 2008

It is slipping away...

Here is just one more piece of evidence pointing to a slowdown in the property market.

This chart tracks the number of transactions paying stamp duty. As you can see, the numbers have been declining sharply for the last couple of months.

One quick word of warning; this data may include some commercial property transactions. Normally, these kind of transactions account for about 10 percent of the total. However I couldn't get a clear understanding of whether this particular series included commercial property transactions or not.


aSteve said...

That scale can't be right, can it? 200 transactions (per month) at the height of the boom in November '06?

Incidentally, when was the last time that so few transactions paid stamp duty?

Alice Cook said...

Asteve, the November 06 data was abnormally large due to some processing backlog. some of the transactions were completed the previous month, but the stamp duty was collected the following month.

Remember, also that these numbers probably have some non-residential properties in there. Also, it excludes transactions less than GBP 40,000.


aSteve said...

Oh, I wasn't bothered that October data appears in November '06...

Either I was being blind or you snuck in a "thousands" in the title. ;)

I think we can safely ignore properties costing less than £40K - I've not seen anything relevant that cheap for a decade - LOL!

I'm interested in the idea of "time on the market"... I think that Rightmove claim ~90 days. Rightmove alone, have ~1m properties on their books, so - if the 90 days is honest - there would need to be 300,000+ property transactions for properties to be sold, on average within ~90 days... even ignoring properties sold by private treaty and at auction.

I'd love to see a graph of implied time on the market - if we can find reasonable estimates for the number of properties advertised each month. I suspect it would be a rather cute exponential curve.

I'd also love to see this graph going further back into history - and for there to be a long-term mean drawn... to see when liquidity in the housing market went below trend.

Alice Cook said...


You are too quick for me. I tried to sneak it in. It is what happens when you are answering the phone and posting at the same time.


aSteve said...

I would have guessed "thousands" - if 2000's hadn't made more sense in the context of other media reports about time on the market.

Another good graph would be the mean period between re-sale over time... to take into account the expansion of new-build property.

aSteve said...

Oh... and... can we plot this against the mortgage approvals?

Over the last three months, it seems, a far greater proportion than normal of house purchases have been without any mortgage whatsoever. ;)

Mark Wadsworth said...

I don't know what source you used, but HMRC give a breakdown between residential and commercial (albeit a year out of date) here.

Anonymous said...

I take it this supports the general progression of a housing bust:

- Sharply reduced volumes;
- Inventory build up;
- Stagnant prices;
- Cliff dive.

It doesn't matter so much that some CRE is in the data because that's crashing too, so the trend will be the same.


El Sid said...

Just one more sign that the bubble has burst.

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