Some experts believe the figures do not reflect the "utter carnage" from the mini budget
The number of residential transactions in the UK increased by 12% annually in November to 114,200 – a figure that is also 4% higher than the previous month.
Latest data from HM Revenue & Customs (HMRC) also showed a 12% monthly increase in non-residential transactions, which totalled 10,550 in November – 2% lower than the year prior.
Ross Boyd, founder of mortgage comparison platform Dashly.com, remarked that the HMRC report “does not reflect the utter carnage that has ensued since the mini budget.”
“The fourth quarter of the year has seen transactions drop, as borrowing rates rose sharply and people decided to sit tight, and this will become evident in the figures during the first quarter of next year,” Boyd said. “However if, as most expect, prices fall next year, then that could give a leg-up to many first-time buyers so transaction levels could prove better than expected.
“A lot will depend on the resilience of the jobs market and how stubborn inflation proves, as the cost-of-living crisis, coupled with higher borrowing rates, is hitting confidence for six. On a positive note, many expect bank rate to peak far lower now, which will prove invaluable for borrowers.”
HMRC agreed that recent increases in mortgage rates and subsequent impacts on the residential housing market have not yet had an observed impact on the latest statistics.
“This is likely because transactions data is based upon date of completion, which is later in the property purchase process, and it typically takes between two to four months for a house sale to complete,” the government department explained in its monthly property transactions report.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that transactions are the better measure of market health than more volatile property prices.
“Prices have held up better than we might have feared given recent cost-of-living and mortgage rate uncertainty,” he pointed out. “Although these transaction figures are a little dated, activity is clearly recovering from the shock of the mini budget a few months ago now that rates have begun to settle.
“Many buyers will be contemplating their next moves over the festive break, and recent pick-up in enquires will mean that figures will probably continue on a better-than-expected course into the new year.”
For Richard Pike, chief sales and marketing officer at tech provider Phoebus Software, it is encouraging to see that the pipeline of transactions continued to increase in the months leading up to the chaos caused by the mini budget.
“Whether this trend will continue into the new year is questionable, especially as the winter months will be the most expensive, even with the energy price cap,” Pike commented. “Lenders will be looking to finish the year and head into 2023 on a high.
“So, the recent spate of rate reductions could continue, even as the base rate increases. Keeping on top of risk and vulnerability will continue to be a priority though and the technology lenders have in place will come to the fore.”
