HMRC data shows property transactions down 3% – Show House

The HMRC has released the monthly property transactions statistics for December, which show that the non-seasonally adjusted transaction estimate was 108,960, down 3% on November and 1% on December 2021.
The seasonally adjusted transactions estimate is 101,920, a 3% reduction on the previous month but a 1% increase on December 2021.
The HMRC states that the increase in mortgage rates is reflected in the figures, with both seasonally and non-seasonally adjusted transactions suggesting a potential slowing of the housing market. As the data references completions, and a house sale typically takes two to four months to complete, the HMRC suggests that the impact of higher mortgage rates would only now begin to appear.
Here’s how the results have been received within the housebuilding industry:
Nick Leeming, chairman of Jackson-Stops, said: “It’s encouraging to see transaction levels hold year on year. Buyers have made the most of the quieter period to complete their transactions, clearing the way for a new wave of properties to enter the market in the spring and provide an anticipated bump in instructions and buyer interest. Ahead of this, we have seen mortgage rates fall to their lowest point for three months, helping to ensure that borrowing remains accessible, and transactions can still go ahead in significant numbers up and down the country.”
“With supply levels remaining steady as we move further into 2023, house prices remain largely insulated even if growth levels soften. Buyers remain in the market and keen to go ahead in areas where supply is available, but where we are seeing a change is in the amount that they are willing to spend in order to proceed with a purchase. Buyers feel much more grounded in reality now with a long-term outlook, as we wave farewell to the frenzied pace of bidding wars seen six months ago.
“With some buyers choosing to put their property search on hold towards the end of the year, as often happens when the weather turns colder and Christmas plans take priority, this allows those continuing with their search to be more price-aware and willing to negotiate on optimistically-priced properties.”
Andy Sommerville, director at property data and insight provider, Search Acumen, commented: “The final transaction data for 2022 echoed the trend we saw throughout the last quarter, reflecting a cooling housing market weighing heavy under the cost of living crisis. The recessionary period we are now in the midst of, alongside the higher borrowing rates on offer compared to this time last year, has certainly impacted people’s appetite to move. This can be seen in the data, which saw a 3% decrease in transaction volumes in December. Although transaction levels tend to seasonally decline at this time of year, it is a sensible assumption to expect to see this trajectory continue in 2023 as we settle into a sustained period of financial difficulty.”
“Looking ahead, homebuyers who are still looking to move are now part of a vital group keeping the residential market moving. We know over a third of property sales fell through last year, peaking at over 52% of all transactions in November, a number that could be set to increase due to the upcoming HM Land Registry strike in February, which has the potential to even further delay transactions and exacerbate homebuying problems being felt across the country. It is vital that we help the industry stay on its feet using technology as the catalyst for change.”
Adam Oldfield, chief revenue officer at Phoebus Software, said: “Although no one will be surprised by the dip in residential transactions in December, that dip is really quite small and the current number is still above pre-pandemic levels. This is an encouraging sign that, despite the knock in confidence in September, the housing market continues to move along, albeit at a slower pace.”
“As predictions abound for 2023, and with conflicting reports regarding the number of buyers registering interest this month, it is perhaps inevitable that some of those predictions err on the negative side. Nonetheless, there are signs that confidence is returning and, while fuel prices continue to fall and inflation steadies, might we see a traditional post-Christmas pick up in transactions in the first quarter?”
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