UK property transactions up 15% from January – Show House
According to the latest government data, real estate transactions increased by more than 15% in February, but were 20% below the frantic peak of February 2021.
The provisional unadjusted estimate of UK residential transactions in February 2022 is 96,250, 20.6% lower than February 2021 and 15.3% higher than January 2022.
Lawrence Bowles, director of residential research at Savills, said: “Transactions reached 96,250 in February, up 15% from January (83,450). This reflects the growing momentum we saw in the market after the winter break. This brings total sales to 179,900 in the first two months of the year. This is -18% less than last year (219,700), but still the second highest since 2007 (227,160).
“While we are still seeing strong momentum in the market, the agreed sales data shows that we are also starting to see a stratification of sales activity between different price levels. TwentyCi records show that property sales under £200,000 are still much lower than they were before the pandemic, while sales of properties worth £300,000 to £500,000 were 47% above their pre-pandemic levels and between £500,000 and £1m the market has seen 73% more sales than pre-Covid Part of this change is due to the fact that there simply aren’t as many homes under £300,000 than before as we have seen values rise from the source of the pandemic
“However, it also reflects a shift in affordability. The Bank of England has already raised the base rate three times in the past six months. With inflation still high, mortgage lenders expected further rate hikes. This limits affordability at the point of purchase, especially for first-time buyers who have less equity to back them up.
“The pressure is felt less acutely by mortgage movers, many of whom have built up a lot of equity as their existing home has appreciated in value, and cash buyers, who completely bypass the affordability controls of the FCA.
“It will be particularly difficult for first-time buyers who have planned to make the most of Shopping Assistance before the program ends next year. As the number of first-time channel builders begins to decline, we expect transaction activity to peak in the first half of this year and slow as we head into the fall.
John Phillips, National Operations Manager, Just Mortgages, said: “While the year-over-year statistics were still unfavorable compared to 2021, a more accurate comparison is to the previous month. As transactions continue increase, the housing market continues its inexorable progression.
“Looking at the past few months, the colder weather hasn’t dampened the desire to move, and the trend is positive as we enter the spring months. One hurdle on the horizon is the rising cost of housing. life, which will really pinch in April with the rise in energy prices.As always in the housing market, there will be a delay before the impacts are felt, but this may cause a few people to suspend the moves.
“Conversely, the Bank of England’s decision to raise rates may actually spur some people to act. Given that rates will inevitably rise somewhat over the next few months, savvy buyers may be considering a move. now before they increase any further.
“A slight reduction in the number of buyers may not be a bad thing for the housing market, as it could slow the rise in house prices somewhat, with some forecasts calling for a decline in March and April. Although we weren’t anticipating much in the spring budget for the housing market in particular, it will be interesting to see if there are measures to curb rising energy prices.
The provisional seasonally adjusted estimate of UK residential transactions in February 2022 is 112,240, 20.8% lower than February 2021 and 4.4% higher than January 2022
Guy Gittins, CEO of Chestertons, said: “The stamp duty suspension has proven that the current system simply prevents people from being able to move to a property that suits them and their family. We would always welcome any kind of review regarding SLDT which would help to see more properties come to market. For example, this could be a reduction for pensioner downsizers on the SLDT they pay for a small house when they move out of a larger family home that is surplus to requirements.
“The government has spoken at length about fixing the ‘broken’ housing market in the UK, but the supply of new homes, both for sale and to let, is still well below target rates. The situation has worsened over the past 20 months as buyer demand has surged, leading to price spikes and compounding the country’s inflation problems. We believe it is time for the public sector to become more involved as a player in the development of new housing.
“We also want the Chancellor to raise the zero bracket of inheritance tax, which is the threshold below which zero tax is payable. The current rate of £325,000 has been in place since the 2009/10 tax year. Considering that house prices have since risen 76% and that for most people the bulk of their inheritance is their property, a tax update seems long overdue.