Residential and non-residential property transactions were significantly higher than the previous month
The number of UK residential transactions in March 2023 was estimated at 94,870, around 14% lower than the same month of the previous year, but 26% higher than February 2023, the latest HM Revenue & Customs (HMRC) Property Transaction data showed.
HMRC noted that while residential transactions have declined in recent months, there was a slight increase in provisional property transactions in March.
It added that during the spring of 2020, substantial decreases in property transactions were reported due to the COVID-19 pandemic. UK residential transactions gradually increased in subsequent months, alongside large peaks in March, June, and September 2021 caused by temporarily increased nil rate bands of Stamp Duty land tax, land and buildings transaction tax, and land transaction tax.
Meanwhile, the latest HMRC report also showed a 6% year-on-year increase in the number of UK non-residential transactions. The March 2023 total of 13,040 was also 59% higher than the number recorded in the previous month.
“Although we were still feeling the fallout from the mini budget across the housing market months down the line, it appears from the non-seasonally adjusted transaction figures which have been in the pipeline for upwards of three months, that things weren’t as bad as everyone thought,” Adam Oldfield, chief revenue officer at Phoebus Software, commented.
“Thankfully, even though there are still obvious concerns while inflation remains in double digits, confidence appears to be increasing. Of course, the current increase in activity won’t be seen in the HMRC figures for another couple of months.
“The key for lenders, and brokers, will be to keep the hopper full, and that means looking at future lending holistically. There is a huge number of people on fixed rate deals that are coming to an end this year. House purchases may well be increasing at the moment, but that is only half the story and helping borrowers coming off fixed rates presents a huge opportunity that needs to be managed well.”
Paul Neal, mortgage and equity release specialist at Missing Element Mortgage Services, said there seems to be a bit of a lull in the market at the moment, with so much economic uncertainty and inflation still frighteningly high.
“That being said, we have seen a slight increase in market activity during the past 12 weeks, which may reflect the uptick in transaction levels compared to February,” Neal added. “However, the problem remains a shortage of stock on the market, and the fact that the stock that is out there is moving very slowly.
“Many people appear to be waiting for a drop in prices and interest rates but are overlooking the fact that lower interest rates will ignite demand, driving prices up again. In short, the current market is a great time to buy.
Emma Cox, managing director of real estate at Shawbrook, said that sales volumes are yet to catch up with what is looking like a return in demand to the property market.
“While buyers and sellers have tentatively been dipping their toes back in, March’s property transactions were subdued,” Cox noted. “It’s not as gloomy as it appears, though. Given how long it can take to complete a purchase, it’s likely a lag from Christmas when the market is typically quiet anyway, compounded by soaring inflation and mortgage rates at that time.
“We’ve seen increased demand from professional property investors, who are making the most of opportunities in the market, and I’m confident that as spring turns into summer, we’ll see a positive trend emerge.”
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