Residential transactions drop 5.7% but strong end-of-year continues

Residential property transactions have dropped 5.7% month-to-month according to the latest information published by HMRC.

The provisional seasonally adjusted UK property transaction count for November 2015 was 101,960 residential and 8,970 non-residential transactions.

The seasonally adjusted estimate of the number of residential property transactions decreased by 5.7% between October 2015 and November 2015. However this month’s seasonally adjusted figure is 3.0% higher compared with the same month last year.

Compared with last year however, the number of property transactions is slightly lower, with 1,125,360 completed in the first 11 months of 2014 compared with 1,107,250 recorded by HMRC for the first 11 months of 2015.

Richard Sexton, Director of chartered surveyor e.surv said: “First-time buyers hold the key to the fortunes of the property market. Rising wages, low inflation and delayed interest rate rises have all played their part in helping first-timers onto the property ladder. However, there is more work to be done to get the market firmly back on its feet.

“Last month saw small deposit lending stall, totalling just 16.3% of total house purchase approvals. Lenders are willing to help, but barriers remain for aspiring homeowners. Spiralling house prices are still holding back buyers.

“Against this, the impact of measures such as the Help to Buy ISA remain uncertain but one solution is clear. More entry-level homes are needed. December should spell festive cheer for the property market – if Christmas wishes of more affordable homes really do come true.”

The effect of the Chancellor’s new giveaways to first time buyers as announced in the autumn statement are yet to be felt by the market but could be just round the corner. Andy Sommerville of Search Acumen doesn’t put it past the Chancellor to produce new surprises in his next budget.

Andy Sommerville, Director of Search Acumen said: “Although residential transaction numbers are down slightly on October, we shouldn’t be too concerned – the number of transactions in November was 3% higher than at the same time last year. Overall, the government’s efforts to urge aspiring homebuyers onto the housing ladder appear to be having a continued impact.

“It’s unlikely to be smooth sailing in 2016, however, as buy-to-let investors seek to complete their purchase before stamp duty changes come into force in April. We can expect a surge of transactions before the deadline and a levelling off from May, with a risk that ordinary buyers could be caught up in the scramble.

“The Chancellor could decide to pull another rabbit out of his hat at the next Budget, which could further improve the outlook for the residential market from May onwards. If his recent form is anything to go by then further housing measures will be targeted firmly at boosting homeownership.

“The key to keeping a fluid housing market ticking over will be to deliver the promise of new homes as soon as practically possible.”

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