Property Transactions Continue to Drop at the End of the Year
Em Morley - January 24, 2019
The latest Property Transactions Count report from HM
Revenue & Customs (HMRC) shows that home sales continued to drop at the end
of last year, as per tradition in the housing market.
The provisional seasonally adjusted UK property transactions
count for December 2018 was 102,330 residential and 11,230 non-residential
This seasonally adjusted estimate of the number of
residential property transactions dropped by 0.1% between November and December
last year. On an annual basis, however, December’s estimate is up by 3.6%.
In December 2018, non-adjusted residential transactions were
approximately 11.5% lower than in the previous month. Year-on-year,
non-adjusted sales were down by 2.9%.
HMRC notes that figures for the three most recent months are
provisional, and are therefore subject to revision.
Comparison of non-seasonally adjusted and seasonally
adjusted data from HMRC shows that activity in the residential property market
is strongest in the summer months, with a clear low point around the end of the
Craig McKinlay, the New Business Director at Kensington
Mortgages, has witnessed this trend: “It’s
usual for transactions to be subdued at the end of the year, as people wind
down for the festive period. However, the continued stagnation is a sign of the
political instability we’re experiencing, and this stagnation is affecting
buyers and homeowners on every rung of the property ladder.
“What’s needed is clarity.
Only once people feel secure will buyers feel comfortable making the moves
which are necessary to ease pressure on the housing market. Removing financial
barriers for those looking to downsize, for example Stamp Duty, would be a
sensible move in freeing up larger properties for those looking to move up the
Neil Knight, the Business
Development Director for Spicerhaart Part Exchange & Assisted Move, tries
to make sense of the data: “The latest property transaction figures show quite
a confused picture – the seasonally adjusted figures show a very slight decrease
from November to December (0.1%), but a 3.6% increase on last year, while the
non-seasonally adjusted figures show transactions were down significantly –
11.5% on the previous month and 2.9% lower than last year. But these are
provisional, so it would be unwise to make any hard and fast analysis of them
at this time.
“Especially as our estate
agency divisions have had a very positive start to the year, which suggests
that the demand is out there and, whilst Brexit uncertainty is definitely
having an impact, it’s not holding everyone back.
“And, when you bring new
housing into the picture, it is clear that activity is very much on the up. In
fact, construction output hit an all-time high in November 2018. All new
construction work was up 3.4%, with new housing up 4.9% and total output
exceeding £14 billion for the first time since records began in 2010. This
suggests that, while Brexit uncertainly may be having an effect on transactions
in terms of those who maybe want to move but don’t need to, new housing is
still very much needed for those who have to move or are looking to make their
first step onto the housing ladder.”
Shaun Church, the
Director of mortgage broker Private Finance, also comments: “The property
market has reached a stalemate, as Brexit uncertainty causes homebuyers and
sellers to put their property plans on hold. Both sides are waiting to see what
the near future holds for the UK property market, before they make their next
“While 2018 saw the
market flatten, 2019 should see small pockets of growth. Activity at the lower
end of the market, particularly among first time buyers, is likely to account
for a large chunk of market activity. These buyers are unencumbered by the need
to sell an existing property, and empowered by easing house price growth and
Stamp Duty exemptions.
“In recognition of the
flurry of activity occurring at the lower end of the market, lenders are
offering competitive rates, alongside relaxed lending criteria to attract first
time buyer business. As a result, market competition is bringing a further
boost to first time buyers, making owning a property more affordable once the
initial hurdle of saving up a deposit has been passed.”