The number of residential property transactions in November increased by 12% compared with the same month a year earlier, according to the latest figures from HMRC.
On a non-seasonally adjusted basis, there were 114,200 transactions in November this year, which also represents a rise of 4% on October.
The recent hike in mortgage rates have not yet had an observed impact on statistics, mainly because transactions data is based upon date of completion.
Reflecting on the latest figures, Jeremy Leaf, north London estate agent, said: “As usual, it is transactions which are the better measure of market health than more volatile property prices. In fact, prices have held up better than we might have feared given recent cost-of-living and mortgage rate uncertainty.
“Although these transaction figures are a little dated, reflecting what happened a few months ago, 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.”
In light of the economic backdrop, transaction figures coming out of HMRC remain surprisingly strong, in part reflecting the urgency of buyers to lack into mortgage deals agreed before the rate rises of the past three months, according to Frances McDonald, research analyst at Savills.
But lead indicators from the RICS, Bank of England and mains listings agencies, suggest a somewhat lower turnover market next year due to limited mortgage product availability, along with high rates and stretched affordability.
McDonald said: “Looking ahead to the early part of 2023, our latest buyer and seller survey suggests that needs-based buyers are likely to be the most active buyer types whilst mortgage rates remain high and affordability constraints more discretionary and lifestyle moves. But levels of commitment to moving amongst those looking to ‘right-size’ their homes, whether upsizers or downsizers, rise significantly over the next year or two.”
Jason Tebb, CEO of OnTheMarket, commented: “Transaction levels in November picked up slightly compared with October, and were also greater in number than in November 2021, as the housing market continues to rebalance.
“Our own data indicates a dip in seller confidence in November, with 63% of sellers confident they’d sell their home within the next three months compared with 82% in October. It doesn’t mean they’re no longer confident about selling, just less confident about doing so as quickly as they might have been even a month ago. This is hardly surprising with Christmas approaching and seasonal factors coming into play.
“As interest rates and the cost of living continue to rise, consumers may feel less confident in the short term but people move for different reasons and that isn’t going to change, even if market conditions are tougher.”
Andy Sommerville, director at Search Acumen, believes the realities of the cost of living crisis are undoubtedly having an impact on the housing market, with transaction volumes levelling out as we head towards the end of the year.
He said: “With the Bank of England recently raising its base rate for the ninth time in a row to 3.5%, homeowners looking for a mortgage are facing inflated payments, alongside a cooling housing market, as the UK’s recessionary period settles in. So, the market does still continue to move, only slowly, with a less than 1% rise in the transaction volumes on October’s numbers.
“Conveyancers are continuing their efforts to get property sales over the line in time for Christmas, addressing the backlog that still stands from a sustained busy spell as a result of the extreme market activity and the pandemic. However, despite the sustained activity in the market, it is likely that Government cutbacks and a new focus on public sector efficiency, along with threats of HM Land Registry strikes, will affect the industry’s ability to respond to demand.
“The best way for conveyancers to keep pace is by leveraging technology to assist with the parts of their job that can be automated. This allows property lawyers to focus on the parts of the job that require their expertise, rather than manually completing tasks that could be done quicker using the digital systems.
“Compounding the pressures of sustained demand, our latest Conveyancing Market Tracker revealed that the number of active conveyancing firms has risen by less than 1% year-on-year and over a ten-year period, the number of conveyancing firms supporting the housing market has reduced by more than 10%. These figures demonstrate the burden on conveyancers, who are facing elevated caseloads as they attempt to battle through transactions, with fewer colleagues than they need to keep up with demand.”
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