Rolling coverage of the latest economic and financial news
- Latest: UK house sales fell over 60% in July after busiest ever June
- Housebuyers rush to complete deals before stamp duty cut scaled back
Earlier:
- Oil surged 5% on Monday on rising demand hopes and weaker dollar
- Wall Street closed near record high as FDA gives full approval to Pfizer’s Covid vaccine
- Might weaker data delay Fed tapering?
Property sales in the UK more than halved last month, after a surge to complete sales before the stamp duty holiday was scaled back.
Tax office HMRC estimates that there were 82,110 residential transactions in July. That’s a fall of 61.5% compared with June, when the number of homes changing hands in the UK hit a record of 213,120 sales.
Significant forestalling activity by taxpayers was captured within June 2021 UK residential transactions statistics. Since then, an expected but noticeable decrease has been observed within provisional July 2021 UK residential transactions statistics.
Forestalling is when advanced action is taken to prevent an anticipated event. For these statistics, forestalling refers to taxpayers completing property transactions earlier to take advantage of government housing market policies.
Instant Info – HMRC Residential Transactions pic.twitter.com/NPhjMnTbYK
“Given the number of sales that were brought forward, this is a high number and suggests that the dip in the number of sales following the removal of many of the tax savings will be short-lived.
At Yopa we expect another very strong month in September, before the new deadline for the remainder of the stamp duty holiday, followed by another short-lived dip. The housing market remains very active, and we are seeing little sign of any slowing down, even though it is now too late for a new buyer to beat that September deadline.
“It is no surprise that July saw a significant slump in transactions compared to June’s spectacular highs. A record number of buyers had been eager to complete their sale before the stamp duty deadline.
“Transactions may creep up again in August and we can expect another flurry of activity in September as buyers try to complete sales before the final stamp duty savings are removed. This wave is unlikely to match June’s in scale but the effect of the cliff-edge will still be in attendance.
Oil is still higher, as vaccine optimism and easing anxiety about the US slowing its stimulus package continues to boost sentiment.
Brent crude jumped by a dollar per barrel this morning to $69.76 (although it’s slipped back a little), adding to the $3.50 gained yesterday.
On Friday, Dallas Federal Reserve (Fed) President Robert Kaplan said that the rising Covid cases and the economic tensions that come along with it brings him to adjust his view about the idea of pulling away the Fed stimulus. He now thinks it may not be the right time. And, that’s exactly what the market was hoping to hear from a member who, so far, was backing a sooner-than-otherwise Fed tapering.
Kaplan’s dovish comments, combined with soft July PMI data [yesterday] boosted the Fed doves ahead of Jerome Powell’s Jackson Hole speech and sent US indices to fresh records.