The latest HMRC data has revealed that between December 2016 and January 2017, residential property transactions increased by 4.9% - the fourth consecutive month of increases.
The seasonally adjusted figure for the month is 0.3% higher compared with the same month last year.
Jeremy Duncombe, Director at Legal & General Mortgage Club, commented: “These figures show that although the housing market continues to grow in value and the worth of UK housing stock is rising, transaction volumes are not following the growth curve.
Seasonally adjusted, purchasing levels have remained relatively flat on an annual basis, however this shouldn’t be mistaken as being representative of a lack of demand but rather the cost of moving, particularly stamp duty, combined with a chronic lack of affordable housing. If the number of transactions remains static it will result in house price inflation continuing to trend upwards in 2017.”
Stephen Wasserman, Managing Director of West One Loans, comments: “Buyer confidence in bricks and mortar remains positive, as shown by today’s figures. The growth in property transactions is a promising start to the year and, although we’re anticipating some further economic disruptions caused by the political climate at home and abroad, these are encouraging signs. The property financing industry has to keep offering – and indeed offer more – flexible financing options to purchasers. This is imperative if we’re going to keep the market moving and enable property investors to navigate the market successfully in the months and years ahead.”
Paul Smith, CEO of haart estate agents, comments: “Today’s data continues to show the market is resilient with transactions up 4.9% on the year, all the more impressive when considering the rush of buy-to-let buyers entering the market to beat the stamp duty surcharge this same time last year. However the government’s approach to potential property buyers places too much emphasis on the stick whilst offering not enough carrot, and is doing nothing to persuade potential buyers that now’s the time to make a move.
All we as the industry can do is to continue to sing the same tune for change in the hope that the government will listen. Remove stamp duty for downsizers and first-time buyers, build more family homes and improve affordability for millions of first-time buyers that are desperately wanting to jump off the merry-go-round that is the rental trap. It will take a combined effort from all areas of the market to really unlock the potential for change.
Buyer confidence in bricks and mortar remains positive, as shown by today’s figures. The growth in property transactions is a promising start to the year and, although we’re anticipating some further economic disruptions caused by the political climate at home and abroad, these are encouraging signs. The property financing industry has to keep offering – and indeed offer more – flexible financing options to purchasers. This is imperative if we’re going to keep the market moving and enable property investors to navigate the market successfully in the months and years ahead.”
Brian Murphy, Head of Lending for Mortgage Advice Bureau, added: “Looking at the unadjusted figures for January 2017, we can see that there is a decrease of 26% on December 2016 to a total of 82,360 in January 2017. However, referring to the same period in 2015/2016 we can see a pattern emerging, which is that there was an identical month on month decrease of 26%, e.g. 113,690 residential transactions in the UK in December 2015 which decreased to 84,030 in January 2016.
The reasons for this are, potentially, relatively straightforward; many people are keen to complete their transactions so that they can move into their new home for Christmas, hence the rise in volumes of transactions in December, and that January is, to all intents and purposes, a three week month, as many people really don’t get back into the ‘post festive groove’ with work and home until the second week of the new year. One might also suggest that the slightly higher figures in December 2015 versus December 2016 would be a reflection of those who decided to invest in buy-to-let following the announcements made in the the November 2015 Autumn Statement, in a bid to purchase prior to the SDLT increase in March 2016.
It could also be reasonable to suggest that the first half of 2016 was exceptionally busy, as has been previously noted by various industry bodies, therefore a decrease of 2% year on year is neither unexpected nor cause for concern. For context, the level of transactions (unadjusted) in January 2015 was 77,750 which illustrates a steady rise in transactions over the last two years, regardless of the current political and economic climate.”