The property industry has welcomed the latest property transactions data from HMRC, which revealed a monthly increase in December.
The provisional seasonally adjusted estimate of the number of residential transactions in December 2024 was 96,330, up 19% on the same period in 2023 and 3% monthly increase.
The provisional non-seasonally adjusted estimate of the number of residential transactions in December was 98,120, 15% higher than December 2023 and 7% lower than November.
In addition, the provisional seasonally adjusted estimate of the number of non-residential transactions in December 2024 was 9,850, 3% lower than a year prior and 4% higher than November.
The provisional non-seasonally adjusted estimate of the number of non-residential transactions in December was 10,450, 3% lower than the year before and 7% higher than the previous month.
Industry reaction:
Amy Reynolds, head of sales at Antony Roberts, said: “These figures offer valuable insight into overall activity and are a key indicator as to how the market is likely to shape up in early 2025.
“Steady transaction volumes shows that higher borrowing costs and affordability pressures are impacting buyers, preventing the market from running away with itself.
“We found that early January was quiet but the month as a whole has been busier than normal with a good number of market appraisals, which bodes well for a strong spring market.
“In areas where stock is limited, markets have remained steady, particularly the family home market with work-from-home potential.
“Homes that are well priced and well presented are still selling relatively quickly; while buyers may pause to assess financial implications, high-demand areas are likely to retain interest.”
Nathan Emerson, CEO of Propertymark, commented: “Stamp duty changes across England and Northern Ireland, more competitive mortgage deals, easing financial pressures and higher house prices are all contributing to higher demand and growth within the housing market.
“This overall mix of market conditions has inspired many and provided extra confidence many people might have been waiting for to consider their next house move.
“Propertymark member agents reported that new buyers registered per branch have on average increased year on year by 44%.
“Therefore, with demand rising, now is a compelling moment to consider putting your house on the market.
“However, activity will likely settle around April especially, allowing those looking to move home to more comprehensively scan the market and negotiate in a slower-paced and more unpressured marketplace.”
Nick Leeming, chairman of Jackson-Stops, stated: “The rise in transactions in December can largely be attributed to the pending Stamp Duty deadline in March.
“No doubt buyers across London and the South East in particular would have been pushing for deals to get across the line given the traditionally higher tax rates in this part of the country.
“This is evidenced across the Jackson-Stops network with the number of new applicants far outweighing new instructions in December in Bury St. Edmunds, Newmarket, Dorking, Northampton, Reigate and Sevenoaks.
“House prices are also holding steady, and growing in some local markets which has put the market on firm footing despite the UK’s economic outlook painting a mixed picture.
“Positively for borrowing buyers, widespread predictions are anticipating a number of cuts to the base rate this year, with rates possibly falling to 3.5% in 18 months’ time.
“Yet, inflationary pressures and low growth will leave consumers feeling like they have less disposable income in their pocket.
“Fundamentally the market remains in a steady position, underpinned by lifestyle and life stages driving sales, meaning that committed buyers are able to press on.
“Though a sustained period of stability, coupled with greater borrowing affordability should give undecided buyers the confidence they need to renew their searches in 2025.”
Jason Tebb, president of OnTheMarket, said: “Steady transaction numbers in December are encouraging, particularly given the time of year, as transactions are a better indicator of market health than house price fluctuations.
“Two rate reductions in the second half of last year bolstered buyer and seller confidence, and with further cuts expected this year, there is cautious optimism which bodes well for the spring market.
“While some lenders have reduced their fixed-rate mortgages this month, helping ease affordability, increased stock means buyers have more choice so are in a stronger negotiating position and remain price sensitive.
“With stamp duty changes providing an extra motivation for first-time buyers in particular to transact over the next few months, a further rate cut from the Bank of England would be timely and give further impetus to the spring market.”
Joe Pepper, UK Chief Executive Office at PEXA, said: “Against a backdrop of a stagnating economy, December’s uptick in transaction activity is a glimpse of light for the housing market. This activity is most likely attributable to buyers hoping to complete their transactions before Stamp Duty changes in April.
“We anticipate this pattern of activity to continue as the deadline looms, especially amid heavy speculation of an interest rate cut next week. Buyers will be rushing to secure the best deal from lenders and complete the buying process before it is too late.
“This is great for getting the market moving, and good for the economy, but it will also place an inordinate amount of pressure on the infrastructure that sits behind the housing market. This is especially true for the conveyancing system that is already at maximum capacity, exacerbated even further by demand in the remortgage market with some 700,000 borrowers needing to remortgage this year. The entire system could be overwhelmed beyond its means. The urgency of investment in vital digital transformation cannot be overstated if we’re going to see the positive outcomes of this activity for all involved.”
Tom Bill, head of UK residential research at Knight Frank, added: “Transactions in December were 5% below the five-year average and we expect rising mortgage rates will increasingly weigh on trading activity this year, particularly as sub-4% mortgage offers disappear and stamp duty increases from April. We recently revised down our UK forecast for house price growth to 2.5% in 2025 and demand will only strengthen once multiple rate cuts move closer into view.”
Property industry reacts to Nationwide data with marginal house price gain in January
Read the orginal article: https://propertyindustryeye.com/the-latest-data-from-hmrc-is-a-sign-of-housing-market-recovery/
