Industry experts share their thoughts
Residential property transactions in the UK were significantly lower in March this year compared to the prior year, the latest HMRC Property Transaction data showed.
HMRC reported that the non-seasonally adjusted estimate of UK residential transactions in March 2022 was 110,990, about 36.2% lower than the figures from March 2021. The seasonally adjusted estimate was 114,650, around 35.7% lower than that of the previous year.
However, when compared to the figures from the previous month, both non-seasonally and seasonally adjusted estimates for March 2022 were higher by 18.2% and 2.6%, respectively.
HMRC noted that year-on-year comparisons for UK residential transactions should be treated with caution as significant forestalling was still observed in March 2021 caused by temporarily increased nil rate bands of Stamp Duty Land Tax and Land Transaction Tax.
Lenders, brokers, and property agents were also quick to downplay the decrease in the number of residential property transactions.
“The Stamp Duty holiday has distorted the data so it was inevitable that transaction levels in March were down fairly significantly on the same month last year,” Andrew Montlake, managing director at mortgage broker Coreco, said.
He also pointed out that there is an extraordinary lack of stock, thus, bringing down the number of recorded property transactions.
Andrew Simmonds, director at Bristol-based Parker’s Estate Agents, echoed Montlake’s remarks that transactions were being limited by the sheer lack of stock and that the Stamp Duty holiday had probably skewed the data.
He added, however, that the past few weeks had seen an increase in new instructions and buyers seem to have become more active again.
“I believe the next quarter will show a strong transactional market as the spring and early summer are often a key time to buy and sell homes,” Simmonds said.
“The latest data from RICS shows a slight increase in homes coming on to the market in March for the first time in 12 months, coinciding with buyer enquiries also rising at a similar level. I expect housing transactions to continue to rise during the spring and going into summer as is traditionally the case,” Richard Pike, Phoebus Software sales and marketing director, shared.
There is still plenty of demand from buyers, and properties for sale at the right value still sell very quickly, experts in the property industry insisted.
“Despite the pressure on borrowers caused by the rise in the cost-of-living, demand remains high and the overall outlook for the market is strong. This is another clear reminder of the resilience of the current housing market and its ability to weather difficult conditions,” Kevin Roberts, director at Legal & General Mortgage Club, remarked.
Despite this high demand, other industry experts believe that there is now some hesitation from buyers due to increasing mortgage rates and potentially falling house prices.
“There are concerns that rising living costs will impact lenders’ affordability calculations when it comes to getting a mortgage, making it more important than ever to seek advice,” Mark Harris, chief executive of mortgage broker SPF Private Clients, said.
“The pool of demand is still deep, but the current is weakening with fewer people registering their interest in purchasing a property,” Kate Allen, owner of Devon-based luxury holiday lettings specialist Salcombe Finest, commented.
“With swathes of availability across Airbnb and rental income plummeting, additional stock will flood the market as those buy-to-let mortgages fail to stack up, or homeowners start defaulting on mortgage repayments,” Allen added.
“It’s not a popular view, but we really do need UK property prices to fall in real terms. Imagine how much stronger the economy would be if we didn’t need to spend so much of our disposable income on mortgages and rent,” Graham Cox, founder of the Bristol-based Self-Employed Mortgage Hub, said.
“Businesses would be able to charge less for goods and services, and consumers would have more spare cash to pay for them. And young people would finally have the chance to get on to the housing ladder without signing up for a lifetime of debt servitude.”
